Peter Schiff: MicroStrategy Lost Its Ability to Buy Bitcoins

Peter Schiff claims that MicroStrategy has lost its issuance channel that financed its Bitcoin purchases. He stated this in his podcast on October 2. Currently, shares of the preferred category Stretch (STRC) are trading around $99.4, which surprised Schiff himself. He believes that the recent rise in Bitcoin prices and the buyback of STRC shares have contributed to the recovery of their price. According to Schiff, this growth could have restored confidence in the stock or triggered the closure of short positions.

However, Schiff expressed doubts about the restoration of key financing channels for MicroStrategy, pointing to restrictions related to the sale of STRC shares. In particular, he noted: "There is no possibility that he will be able to start selling more Stretch; this means he won't be able to raise money to start buying more Bitcoins." MicroStrategy continues to increase its Bitcoin reserves, financing its latest purchases through the sale of common shares. Since early May, the company has raised about $1.95 billion from STRC sales and as of September 27 holds a reserve of $5.02 billion to cover dividends and interest on debts.

In turn, executive chairman MicroStrategy Michael Saylor noted that the 30-day historical volatility of STRC as of October 2 was 9%, which is below 10% for the SPDR S&P 500 ETF (SPY). This may indicate more stable trading of the company's shares. Nevertheless, Schiff warned that Bitcoin could fall in price again if technology sector stocks also start to decline. The next weekly statement from MicroStrategy, in his opinion, will show whether the financing of Bitcoin purchases continues through the sale of common shares.