Peter Schiff Issues Warning on MicroStrategy Stock: Details

Renowned economist and long-time Bitcoin skeptic Peter Schiff has issued a stark warning regarding the stock of MicroStrategy (MSTR). In a recent tweet, Schiff claimed, “MSTR has got to be the most overvalued stock in the MSCI World Index. When it finally crashes, that’s gonna be the real bloodbath.”

Schiff is well known for his outspoken criticism of Bitcoin and cryptocurrency in general. A vocal proponent of gold as a store of value, Schiff has often argued that Bitcoin is a speculative bubble and lacks the intrinsic value of traditional assets. His latest comments on the MicroStrategy stock might draw from this standpoint.

$MSTR has got to be the most overvalued stock in the
MSCI World Index. When it finally crashes, that’s gonna be the real bloodbath!

— Peter Schiff (@PeterSchiff) October 22, 2024

MicroStrategy’s market value has grown from $1.5 billion to more than $40 billion in just four years. Michael Saylor, cofounder and executive chairman, attributes the company’s success to its Bitcoin approach.

Since 2020, MicroStrategy’s stock has outpaced every firm in the S&P 500 index, rising more than 1,540%, while the S&P 500 rose by only 111%. Originally an enterprise software company, today MicroStrategy owns 252,220 Bitcoin — more than 1% of all Bitcoin that will ever be mined.

MicroStrategy has recently rebranded itself as a Bitcoin development firm, exploring innovative ways to integrate Bitcoin with traditional finance.

MicroStrategy at 2.5x premium to Bitcoin

Shares of MicroStrategy (MSTR) continue to advance relative to the price of Bitcoin (BTC), expanding the premium to the value of its holdings to the highest level in more than three years.

MicroStrategy’s net asset value (NAV) is calculated by dividing MSTR’s market capitalization by the value of its Bitcoin stack. The NAV premium recently touched a new high of 2.5 times its Bitcoin holdings of around $17 billion.

While MicroStrategy’s (MSTR) stock price might be high thanks to its perky valuation compared to the amount of its Bitcoin (BTC) holdings, Schiff’s latest warning might tilt more toward his skepticism of Bitcoin and the companies closely tied to its performance. Whether his prediction of a MicroStrategy crash and subsequent “bloodbath” comes to pass remains to be seen.

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