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Renowned economist Peter Schiff dismissed Strategy Inc. (NASDAQ:MSTR) as nothing more than a “highly leveraged” Bitcoin (CRYPTO: BTC) bet on Sunday, arguing against its inclusion in global equity benchmarks.
In an X post, Schiff highlighted last week’s report by JPMorgan analysts that the company risks delisting from major equity indices, such as the MSCI World Index and Nasdaq 100, due to the ongoing sell-offs.
The analysts estimated that roughly $9 billion of Strategy’s $50 billion market value sits in passive funds that track these indices, according to CoinDesk, and that removal from MSCI alone could trigger about $2.8 billion in passive outflows.
“It never should have been included in those indexes in the first place. It’s not a real operating business,” Schiff said about the Michael Saylor-founded firm.
The Bitcoin critic argued that passive index funds should not be “compelled” to buy the company’s stock.
Saylor defended his company, suggesting that JPMorgan’s report was “alarmist” in a recent interview.
“I’m not so sure the numbers are nearly that high. I think actually the numbers would be much smaller,” Saylor told CoinDesk.
Schiff’s criticism of MSTR’s Bitcoin strategy is not new. He has previously argued that the company would have been better off investing in any other asset, pointing out that despite spending over $48 billion on Bitcoin in the past five years, MSTR’s total paper profits are less than 17%. [source]
Bitcoin's ongoing decline has heavily hurt Strategy, currently the world’s largest corporate holder of the apex cryptocurrency. The stock has plunged over 40% in the last month and 62% from its record highs set earlier this year.
The company currently holds 649,870 BTC at an average price of $74,433. This means that another 14% drop from here could put Strategy's position into the red.
Meanwhile, Saylor wrote in an X post,”I Won't ₿ack Down,” possibly indicating that the company would continue to buy more BTC.
Price Action: At the time of writing, BTC was exchanging hands at $86,695.76, up 0.21% in the last 24 hours, according to data from Benzinga Pro.
Strategy shares closed 3.74% lower at $170.50 during Friday’s regular trading session.
The stock maintains a weaker price trend over the short, medium and long terms. How does it compare with other Bitcoin-hoarding companies? Visit Benzinga Edge Stock Rankings to find out.
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Photo Courtesy: T. Schneider on Shutterstock.com
