Michael Saylor's $1.34 Billion Bitcoin Bet Sparks Debate with Peter Schiff

Michael Saylor's Latest Bitcoin Investment

Michael Saylor's company, Strategy, has invested an additional $1.34 billion in Bitcoin, acquiring 13,390 BTC at an average price of $99,856. This brings their total holdings to 568,840 BTC, purchased for approximately $39.41 billion, with an average cost of $69,287 per coin. Saylor continues to follow his strategy of buying and holding Bitcoin long-term.

Peter Schiff's Criticism

Peter Schiff, a vocal cryptocurrency critic, has expressed concerns over Saylor's strategy. Schiff argues that if Bitcoin's price drops below the company's average cost, which he estimates is now over $70,000, Strategy could face significant unrealized losses. He highlights the risks of using debt to finance such large purchases, warning that while this approach works well during price increases, it could lead to financial strain if the market declines.

Risks to Strategy's Financial Health

More than 51% of Strategy's enterprise value is tied to Bitcoin. If the cryptocurrency's price falls, it could weaken the collateral backing the company's debt, potentially leading to forced sales of Bitcoin—a scenario Saylor has sought to avoid. Schiff emphasizes that the strategy of buying high and holding indefinitely only succeeds if Bitcoin's price continues to rise.

A Growing Debate

Schiff's criticism goes beyond philosophical differences, focusing on the mathematical risks of Strategy's approach. As the company continues to buy more Bitcoin, its cost basis rises, narrowing the margin for error. Schiff believes this window of opportunity is already closing, leaving Strategy increasingly exposed to market volatility.