Euro Pacific Capital President Peter Schiff explained on Patrick Bet-David's podcast how Bitcoin will come to “the biggest crash ever” and MicroStrategy will go bankrupt.
A prominent critic of the first cryptocurrency called it a Ponzi scheme with no real intrinsic value. According to him, Bitcoin prices are growing solely due to the hype and the theory of the greater fool. But the emergence of spot ETFs in the US will ultimately lead to the collapse of the asset, Schiff said.
He noted that investors in the growing Bitcoin exchange-traded funds treat cryptocurrency like other speculative assets, and are not its supporters. The founder of Euro Pacific Capital previously compared the latter to sectarians.
At some point, short-term holders of ETF shares will decide to exit their positions, Schiff suggested. Issuers like BlackRock and others will have to sell bitcoins on the spot market.
At the same time, they will need US dollars, rather than USDT, which is widely used in the crypto industry, and there will not be enough liquidity “to absorb these sales,” he emphasized.
Schiff recalled that the largest Bitcoin fund, Grayscale, which operated for many years, did not provide exit for investors, so the discount on GBTC shares periodically reached 50%.
The head of Euro Pacific Capital did not directly answer the question whether MicroStrategy founder Michael Saylor is a “great fool.” The company continues the strategy of accumulating Bitcoin reserves, which began in August 2020. At the end of March, the company already had 214,246 BTC on its balance sheet.
Schiff admitted he didn't understand Saylor's motives. In his opinion, MicroStrategy will inevitably go bankrupt if Bitcoin collapses, since it uses debt financing to purchase cryptocurrency.
Source: Cryptocurrency
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