 ▲ Bitcoin (BTC)/AI-generated image |
Peter Schiff, a prominent Bitcoin (BTC) bear, has stirred the market by predicting the collapse of what he describes as Bitcoin’s pyramid structure and raising the possibility of forced liquidation by Strategy, which holds a massive amount of Bitcoin.
According to crypto media outlet U.Today on March 10 (local time), Schiff warned that if Bitcoin’s price declines, Strategy—having aggressively accumulated the asset—could face a situation where it must dump its holdings onto the market to repay its debts. Schiff argued that the current Bitcoin market is no different from a typical pyramid scheme that relies on a constant inflow of new investor funds to sustain itself, claiming it has now reached its breaking point.
Schiff identified Strategy’s substantial debt financing used to purchase Bitcoin as the core risk factor. “If Bitcoin falls below a certain level, Strategy will have no choice but to sell large amounts of Bitcoin to cover interest expenses or repay loan principals,” he emphasized. He analyzed that if such forced liquidation begins, it would deliver a massive supply shock to the market, potentially triggering a chain reaction of price collapses.
However, within the crypto industry, many argue that Schiff’s claims are excessive concerns stemming from his personal bias against Bitcoin. Considering Strategy’s average purchase price and debt repayment schedule, the likelihood of immediate forced liquidation is considered very low. Phong Le, CEO of Strategy, has repeatedly affirmed that the company maintains a sound financial structure and possesses sufficient liquidity to withstand Bitcoin’s price volatility.
Still, as Bitcoin experiences extreme volatility ahead of a potential push to reclaim the $70,000 level, Schiff’s remarks are exerting considerable psychological pressure on investors. He reiterated his criticism of Bitcoin’s lack of intrinsic value and strongly recommended a return to tangible assets such as gold. Schiff added that if Bitcoin peaks and turns downward, retail investors at the bottom of the pyramid structure would suffer the greatest losses.
Strategy’s Bitcoin holding strategy is seen both as a milestone symbolizing the institutional adoption of digital assets and as a potential risk factor that could amplify overall market instability during downturns. Following Schiff’s warning, market participants are closely monitoring whether Bitcoin can maintain key support levels and tracking Strategy’s additional accumulation trends while focusing on analyzing the asset’s future price direction.
Disclaimer: This article is for investment reference only and the publisher is not responsible for any investment losses incurred based on it. The content should be interpreted for informational purposes only.