Gold investor Peter Schiff on Sunday called Strategy's business model, which created the world's largest Bitcoin (BTC) financial company, a “fraud” and challenged the corporate's founder Michael Saylor to a debate.
Schiff, one among the harshest critics of cryptocurrencies and Bitcoin and a staunch gold advocate, challenged Saylor to a debate at Binance Blockchain Week in Dubai, United Arab Emirates (UAE) in December. In a separate X post, Schiff argued:
“MSTR's business model relies on income funds buying its 'high-yield' preferred shares. However, the published returns are never actually paid out. Once fund managers realize this, they may dump the popular shares.” Source: Peter Schiff
Once this happens, Strategy will now not have the opportunity to issue more debt, triggering a “death spiral,” Schiff continued.
Schiff's challenge and his negative outlook on Bitcoin and the crypto industry typically got here amid a backdrop of Bitcoin falling below $99,000 and a general downturn within the crypto treasury sector as gold returned to cost levels above $4,000.
Bitcoin and Strategy are suffering while gold stays above key $4,000 support
BTC's price has fallen greater than 20% from its all-time high of over $125,000 reached in October, days before the October 10 flash crash that worn out tens of billions of dollars in value from the crypto market.
Strategy's mNAV, its multiple on net asset value, or the monetary premium reflected in the corporate's stock price over underlying BTC holdings, fell below 1 in November but has risen back to 1.21 on the time of writing, the corporate said.
Despite the slight recovery, an mNAV of 1.21 continues to be relatively low; Investors consider a healthy mNAV for a treasury company to be 2 or higher. Strategy's stock has fallen over 50% since July and is trading at around $199 on the time of writing.
Meanwhile, gold has successfully defended the $4,000 per ounce mark despite a temporary dip below this psychological support level and is trading at around $4,085 per ounce on the time of writing.
Gold hit an all-time high of about $4,380 an oz. in October and rose to a market cap of over $30 trillion before falling back to current prices.
