Peter Schiff Accuses MicroStrategy's Bitcoin Model of Fraud, Seeks Debate with Michael Saylor

Peter Schiff, a staunch gold advocate and one of the most vocal critics of Bitcoin, has accused MicroStrategy's business model of being fraudulent. On Sunday, Schiff challenged the company's founder, Michael Saylor, to a debate. Schiff criticized MicroStrategy's reliance on income-oriented funds purchasing its 'high-yield' preferred shares, suggesting these yields would never materialize. Once fund managers recognize this, Schiff predicts they will divest, leading to a potential financial crisis for the company.

Schiff extended his challenge to Saylor to a debate at the upcoming Binance Blockchain Week in Dubai, UAE, in December. He believes that if fund managers abandon MicroStrategy's preferred shares, the company will struggle to issue more debt, potentially triggering a 'death spiral'.

This challenge comes amid a downturn in the crypto market, with Bitcoin dropping below $99,000 and the broader crypto treasury sector facing challenges. In contrast, gold has maintained its position above $4,000, reinforcing Schiff's position as a gold advocate.

Bitcoin and MicroStrategy Face Challenges as Gold Holds Steady

Bitcoin has seen a significant decline, dropping over 20% from its all-time high of above $125,000. This decline was exacerbated by a flash crash in October, which wiped billions from the market. MicroStrategy's mNAV, a measure of its stock price over its Bitcoin holdings, fell below 1 in November but has since rebounded slightly to 1.21. Despite this recovery, it remains below the healthy threshold of 2.

MicroStrategy's stock has suffered, declining over 50% since July, now trading at approximately $199. Meanwhile, gold continues to hold above the critical $4,000 per ounce level, currently trading around $4,085. Gold reached a record high of approximately $4,380 per ounce in October, with a market capitalization exceeding $30 trillion before settling at current levels.