**Schiff’s Criticism: MicroStrategy’s Bitcoin Bet Under Fire**

Gold advocate Peter Schiff has raised serious concerns about MicroStrategy’s aggressive Bitcoin strategy, calling it unsustainable and predicting a potential halt in debt issuance and a sharp drop in the company’s stock. This criticism comes as Bitcoin (BTC) has dropped over 20% from its $125,000 peak, reflecting broader challenges for the crypto market. In contrast, gold has demonstrated notable strength, holding above $4,000 per ounce and achieving a $30 trillion market capitalization high in October, according to TradingView data.

Recently, Peter Schiff accused MicroStrategy of being a “Bitcoin fraud” and publicly challenged CEO Michael Saylor to a debate in the UAE. In this article, we explore the ongoing rivalry between BTC and gold amid rising treasury risks.

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## What is Peter Schiff’s Challenge to Michael Saylor Regarding MicroStrategy?

Peter Schiff’s challenge stems from his ongoing criticism of both Bitcoin and MicroStrategy’s strategy of aggressively accumulating BTC. On Sunday, Schiff charged MicroStrategy with operating a fraudulent business model, claiming it relies on issuing high-yield preferred shares to income-oriented funds—shares he asserts will never deliver the promised returns.

Schiff invited Michael Saylor to debate these issues at Binance Blockchain Week in Dubai, scheduled for December. In a detailed social media post, Schiff explained that once fund managers realize the yields are unsustainable, a mass sell-off could occur. According to Schiff, this would prevent MicroStrategy from raising additional debt, potentially sparking a downward spiral for the company’s stock and its Bitcoin holdings.

Furthermore, Schiff has challenged Binance co-founder Changpeng Zhao to debate tokenized gold assets, highlighting his steadfast preference for traditional safe-haven investments over cryptocurrencies.

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## Why Does Peter Schiff View MicroStrategy’s Business Model as a Fraud?

Peter Schiff bases his fraud accusations on MicroStrategy’s continued dependence on debt and equity issuances to fund its Bitcoin purchases, resulting in the world’s largest corporate BTC treasury. According to Schiff, the “high-yield” preferred shares entice investors with the promise of steady income, but these payouts are ultimately dependent on ongoing capital inflows—not actual profitability.

He warns that if investors become disillusioned, it could trigger a wave of selling, crippling MicroStrategy’s ability to sustain its strategy. Supporting this skepticism, MicroStrategy’s multiple on net asset value (mNAV)—a key metric comparing its stock price to its underlying Bitcoin holdings—dipped below 1.0 in November before recovering to 1.21, as noted by the company. Typically, analysts view an mNAV of 2 or higher as healthy for treasury operations.

MicroStrategy’s stock price has fallen over 50% since July, now trading around $199, highlighting the vulnerabilities that Schiff points out. Financial analysts echo these concerns, noting that MicroStrategy’s fortunes are tightly linked to Bitcoin’s volatility, increasing risks in bearish markets.

All of this unfolds as the broader crypto sector faces significant headwinds. Bitcoin has retreated more than 20% from its October all-time high above $125,000, including a flash crash on October 10 that erased tens of billions in market value. By contrast, gold has maintained its $4,000 per ounce support—trading recently at approximately $4,085—after peaking at $4,380 in October and briefly pushing its total market capitalization above $30 trillion.

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## Frequently Asked Questions

### What Impact Could Peter Schiff’s Predicted ‘Death Spiral’ Have on MicroStrategy’s Bitcoin Holdings?

If Peter Schiff’s “death spiral” scenario comes to pass, MicroStrategy’s vast Bitcoin treasury (worth billions) could come under immense pressure. A halt in debt issuance would restrict new BTC acquisitions and might even force the company to liquidate some holdings during price lows to meet obligations. This could further depress MicroStrategy’s stock and shake investor confidence in corporate crypto strategies.

### How Are Current Market Trends Favoring Gold Over Bitcoin in 2025?

As of late 2025, gold’s stability above $4,000 per ounce is providing investors with a much-needed hedge against economic uncertainty. In contrast, Bitcoin’s volatility—currently trading below $99,000—reflects wider sector corrections. Many investors now favor the reliability of gold, which recently reached a $30 trillion market cap, as a safer alternative to BTC’s more volatile profile.

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## Key Takeaways

**Schiff’s Bold Challenge:** Peter Schiff’s debate invitation to Michael Saylor at Binance Blockchain Week highlights the deep divide between gold traditionalists and Bitcoin proponents.

**MicroStrategy’s Vulnerabilities:** With an mNAV at 1.21 and stock down 50% since July, MicroStrategy’s reliance on unproven yield strategies signals caution.

**Asset Class Contrast:** Gold’s price stability above $4,000 per ounce sharply contrasts with Bitcoin’s 20% drop from its highs, reflecting shifting investor preferences in unstable markets.

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**Conclusion**

Peter Schiff’s outspoken criticism and debate challenge underscore a pivotal moment in the ongoing battle between gold and Bitcoin as alternative stores of value. With MicroStrategy’s business model under scrutiny and market trends favoring safe-haven assets, the debate over crypto versus gold is as heated as ever. Investors and observers alike should watch these developments closely as we head further into 2025.
https://bitcoinethereumnews.com/bitcoin/peter-schiff-warns-of-microstrategy-bitcoin-model-risks-challenges-saylor-to-uae-debate/