Analyst Warns Hedge Funds Shorting MicroStrategy Could Trigger Bitcoin Crash
US economist Peter Schiff claimed that Bitcoin is on the verge of a big collapse.
Peter Schiff, a well-known critic of Bitcoin, usually faces backlash from the crypto community for mentioning “Bitcoin” in his tweets. Despite his usual stance of criticising the cryptocurrency, Schiff’s use of the “Bitcoin” term sparked significant disapproval from crypto enthusiasts a few weeks ago but again he started using Bitcoin & Crypto words in his tweet posts to get attention.
On 17 June 2024, Peter Schiff speculated on the potential impact of hedge funds shorting MicroStrategy (MSTR) by buying Bitcoin or Bitcoin ETFs.
He suggested that if MSTR’s stock price falls, these funds might sell off their Bitcoin holdings to cover their short positions, which could trigger a significant drop in Bitcoin’s price. This, in turn, would create additional downward pressure on MSTR’s stock, even as the short positions are being closed.
Furthermore he directed this concern to the former MicroStrategy’s CEO, Michael Saylor, indicating that such a scenario could have a cascading effect on both the company’s stock and the cryptocurrency market.
Before this tweet, Schiff also posted a tweet about Bitcoin price under the current situation.
Schiff raised a question that why Bitcoin’s price has remained stagnant despite substantial buying from 11 Bitcoin spot ETFs over the past three months.
He noted that Bitcoin’s trade current price is 11% below its March high and wondered who might be selling if ETF investors have been buying.
Also he raises concerns about what might happen if these ETF investors lose patience and start selling their holdings, potentially driving prices even lower.
Bitcoin price action
The current trade price of Bitcoin (BTC) is $66,000 & this trade price is 5.5% down over the last 7 days period.
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