Famous gold advocate and Bitcoin critic Peter Schiff has claimed that following the sharp declines in the crypto market, companies operating with the “Bitcoin treasury” model are being dragged into a serious crisis.
Schiff stated that the business model of companies that place Bitcoin at the center of their balance sheets, particularly MicroStrategy (now Strategy), is unsustainable.
According to Schiff, these companies will be unable to survive market pressures because they lack a real business. The analyst noted that Bitcoin's price volatility weakens institutions whose balance sheets are entirely based on BTC. He elaborated, "If you establish a company and base your sole business model on buying Bitcoin, you don't actually have a business. Anyone can buy BTC; you don't need a company to do that."
Critique of Strategy's Business Model
Schiff specifically targeted Strategy, asserting that the company has long maintained an "absurd model." He pointed out that the firm's share premium has largely eroded, and its shares now offer virtually no additional value compared to a Bitcoin portfolio. The analyst highlighted that Strategy stock has lost approximately 65% of its value since last year, predicting that this decline will continue.
Financial Risks and Capital Markets Access
Schiff identified the most critical risk for Strategy as losing access to the capital markets. He explained that the company has financed its Bitcoin purchases by selling new stock and preferred shares. However, he argued that this avenue would be completely closed if the share price fell below the value of BTC. In such a scenario, Schiff contended, the company would be unable to continue its new BTC purchases and would "enter a period of collapse."
Market Context: Bitcoin and Institutional Investors
These pronouncements come at a time when Bitcoin's sharp decline in recent weeks and ETF outflows have placed strain on institutional investors. At its latest price, BTC is trading at $84,171, marking a decrease of nearly 12% on the week.