Strategy Buys 13,390 BTC—Critics Say Collapse Could Be Close

Strategy, formerly known as MicroStrategy, has added another major block of Bitcoin to its reserves. The company purchased 13,390 BTC for approximately $1.34 billion at an average price of $99,856 per coin.

This latest acquisition brings Strategy’s total holdings to 568,840 BTC, pushing the overall investment to $39.41 billion. With the cost of a Bitcoin now averaging $69,287, skeptics caution that the room for error is narrowing further.

According to Peter Schiff, a well-known Bitcoin critic, Strategy’s rising cost basis places the company in a vulnerable position. Schiff says that if Bitcoin goes below $70,000, the firm’s unrealized losses could soon turn into real losses.

The central worry lies in Strategy’s use of debt to fund the purchase of many Bitcoins. Schiff feels this Strategy is risky in a volatile market where prices decline and the company’s financial flexibility deteriorates.

Also Read: Metaplanet Surpasses El Salvador in Bitcoin With $127M Shocking Purchase

Rising Risk as Bitcoin Holdings Dominate Corporate Value

Strategy’s stock, trading under the ticker MSTR, currently sits at $413.44 with a market capitalization of $113 billion and an enterprise value of $123.18 billion. Over 51 percent of that value is directly tied to its Bitcoin holdings.

If the value of Bitcoin falls and the price of Strategy’s stock plummets, then the collateral behind its debt may also pull back. That setup provokes fears of compulsory sales of Bitcoins—something the firm has long been trying to prevent.

All new purchases of Bitcoin increase strategy exposure, tightening the spread between cost and market value. Although the company has robust faith in Bitcoin’s potential prospects, critics say having so much invested in Bitcoin presents an accumulating risk.

Strategy’s aggressive crypto accumulation approach is confirmed by its last billion-dollar Bitcoin purchase. However, an increased cost basis for the company means increased financier risk and louder voices wary of caution.

Also Read: Whale Moves 150 Billion SHIB Off Bybit After Months of Silence—$2.6M Shift

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