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BTC Peter Schiff warns: Bitcoin's recent rebound may not be sustainable, Strategy faces financing risks
Economist Peter Schiff warned that Bitcoin's recent recovery may not be a long-term solution. He pointed out that at a time when Bitcoin is repeatedly blocked near $87,000, a correction in technology stocks may put downward pressure on Bitcoin.
Why is Strategy's Bitcoin purchasing strategy risky?
The core focus of Schiff's criticism is not the price performance of Bitcoin itself, but how Strategy is funding its new Bitcoin purchases. According to his analysis, if the company's ability to create new capital through STRC notes is weakened, its bitcoin accumulation plan to maintain the previous rate will face difficulties.
It is worth noting that STRC shares fell back to around US$75 during the summer, and then rebounded to around US$99.40. The rebound was due to Strategy's repurchase action and Bitcoin's breakthrough of the $80,000 mark, while the unwinding of short positions also played a supporting role. However, Schiff believes that the STRC's rebound has not solved Strategy's fundamental financing problems. As companies face resistance as they sell more STRC notes, their ability to raise the funds needed for new Bitcoin purchases will be undermined.
"They can no longer raise money by selling STRC in large quantities, which means they will not be able to raise money to get more Bitcoin."
Currently, Strategy holds 848,000 bitcoins, accounting for more than 4% of the total global bitcoin supply. In addition, the company also has $4.8 billion in U.S. dollar reserves and $833 million in cash. STRC has a nominal position value of approximately $8.93 billion, a variable dividend yield of 12%, and an effective yield of 12.07%.
If technology stocks fall, why is Bitcoin under pressure?
Schiff's views on Bitcoin are not just based on Strategy's financing structure. He believes that despite weak economic data and negative signals from the bond market, the stock market (especially technology stocks) has previously provided support for Bitcoin's rise.
Schiff reviewed lower PCE inflation data, lower-than-expected employment data, and cooling market expectations for an October rate hike. At the same time, bond prices fell. Oil prices hover around $91 a barrel, with the G7 promising to release 100 million barrels of oil from strategic reserves.
Schiff pointed out that the market has so far not reacted violently to the bad news. But he warned that there were risks in investors showing resilience when they believed that "bad news no longer mattered."
He pays special attention to the performance of technology stocks. Schiff said there has been no serious correction in technology stocks, but such a correction could put pressure on Bitcoin. "Bitcoin will eventually return to reality. Especially when a correction in the technology market comes that has not yet occurred."
Is Strategy still buying Bitcoin?
Despite financing concerns, Strategy continues to buy Bitcoin. Most recently, the company spent approximately $28.7 million to purchase 334 bitcoins, while conducting a $176 million STRC repurchase operation during the same period.
The purchase volume of 334 bitcoins this time is much lower than the level at the end of September. At the time, Strategy acquired 1,665 bitcoins for approximately $142.8 million and completed a STRC transaction worth $152 million.
These data suggest that despite the financing pressures mentioned by Schiff, there are no obvious signs of Strategy suspending its bitcoin accumulation strategy. However, whether the company can continue to increase its holdings of BTC on a larger scale will directly depend on its ability to raise new funds through STRC channels.
Bitcoin's struggles in the $87,000 area make Schiff's prediction more valuable. If technology stocks trigger a new round of selling, Bitcoin's ability to maintain its current upward momentum will face a new test.
