Longtime Bitcoin critic Peter Schiff has reacted to MicroStrategy’s plan to buy $42 billion worth of Bitcoin by calling the company’s chairman, Michael Saylor, an “egg man.”
According to Crypto Basic, MicroStrategy plans to increase its Bitcoin holdings by raising $42 billion for its upcoming Bitcoin acquisition. The business intelligence firm disclosed that it will raise funds by issuing $21 billion in equity and another $21 billion in fixed-income securities over the next three years.
Schiff calls Saylor an 'egg man'
Interestingly, Schiff recently highlighted MicroStrategy’s Bitcoin acquisition plans on Twitter and shared a cautionary tale related to the risks of speculation, calling it the Egg Man. In recounting this story, Schiff mentions an investor who learned about egg futures and actively acquired the asset through his broker.
According to Schiff, the investor initially purchased 1,000 egg futures contracts and eventually increased his holdings to 2 million. This caused the price to surge from $0.25 to $1.75, an increase of 600%. Due to the huge run-up in egg futures prices, this investor decided to sell all 2 million contracts, only to discover that he was the only buyer of the asset, making him the “Egg Man.”
Notably, Schiff hinted that Saylor could end up in the same situation as the Eggman due to his aggressive Bitcoin acquisition strategy.
“Michael Saylor is the Eggman,” Schiff said.
Previous criticism
The financial commentator has been a major critic of Saylor and MicroStrategy for their high-profile exposure to Bitcoin. In August, he warned that such exposure could make MicroStrategy less competitive within the next four years. Schiff made the prediction after Saylor claimed that MicroStrategy's stock has risen $9,95% since August 2020, outperforming other assets such as the S&P 500, gold and bonds.
Additionally, Schiff predicted as early as this year that MicroStrategy’s “leveraged purchases” of Bitcoin could ultimately lead to its demise.
Saylor and MicroStrategy are optimistic about Bitcoin
Despite Schiff’s negative predictions and comments, Saylor continues to lead MicroStrategy’s Bitcoin acquisition spree. The move is in line with his ambition to build MicroStrategy into a Bitcoin bank in the future. Interestingly, the company has made significant progress towards this goal and currently holds 252,220 Bitcoins. Based on the Bitcoin trading price of $69,219, MicroStrategy's 252,220 Bitcoin portfolio is worth $17.45 billion.
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