Financial commentator Peter Schiff has suggested that Bitcoin, the world’s leading cryptocurrency, has been trading sideways for over three months despite continued investment through exchange-traded funds (ETFs).
He also raised concerns about a potential Bitcoin crash, indicating that hedge funds shorting MicroStrategy (MSTR) could be forced to sell the cryptocurrency if their bets unravel.
Bitcoin Stalls After Three Months of ETF Inflows
In a June 17 tweet addressed to his 1 million plus followers, Schiff noted that the Bitcoin market has remained stagnant over the last three months despite billions of dollars flowing into exchange-traded products worldwide. This stagnation, particularly following the approval of several BTC ETFs in the United States, has analysts puzzled, with the current price sitting 11% below its March high.
Peter Schiff pointed this out on Twitter, questioning who is selling Bitcoin, if ETFs are supposedly accumulating it. He suggests that these ongoing sales could indicate waning confidence among other investors.
The concern is that if ETF buyers, who have been consistently increasing their positions, lose patience and start selling, it could lead to a substantial price drop and potentially even a crash for BTC.
MicroStrategy and Bitcoin’s Fate Entangled
Peter Schiff, well-known for being critical of Bitcoin, further expressed concerns about hedge funds shorting MicroStrategy (MSTR), a company heavily invested in Bitcoin. Schiff has questioned how much of the recent activity of buying BTC and Bitcoin ETFs can be attributed to these hedge funds.
He argues that if the price of MSTR drops, these hedge funds will be forced to sell their BTC holdings to cover their short positions, putting further pressure on the price of Bitcoin.
According to the gold enthusiast, this situation could lead to a scenario in which a Bitcoin crash causes additional downward pressure on MSTR as short sellers exit their positions.
While speculative, it brings attention to the complex relationship between Bitcoin and companies like MicroStrategy, which has substantial cryptocurrency holdings.
Over the past six months, MicroStrategy Incorporated (MSTR) has experienced a surge of 164.24%. However, its stock has dropped by 15.43% in the last three months and 5.79% in the past five days. This decline reflects the performance of Bitcoin, which has also fallen by 4.29% in the previous seven days.
Data shows that MicroStrategy currently owns 214,400 bitcoins, with an average purchase price of $35,158.00 per bitcoin. Currently, the value of the company’s Bitcoin holdings is $14,259,649,342, at $66,509 apiece.
Additionally, MicroStrategy initially planned to borrow $500 million to increase its Bitcoin holdings but has since expanded this amount to $700 million, as mentioned by BanklessTimes last week.
