Gold bug Peter Schiff is back with another warning, and this time he's taking aim at the growing trend of companies loading up their balance sheets with Bitcoin (BTC) or Ethereum (ETH). His verdict? They're all headed for bankruptcy.
The Problem With Bitcoin Treasuries
Speaking on Schwab Network, Schiff zeroed in on Strategy (MSTR) and its Bitcoin-heavy strategy. The core issue, according to Schiff, is that the company doesn't generate meaningful earnings. Instead, it racks up losses and keeps the lights on by issuing new debt or equity to buy more Bitcoin, an asset that produces no cash flow.
Here's where it gets interesting: Schiff argues the whole thing only works as long as Strategy's stock price stays above the value of its Bitcoin holdings. Once that flips, the "yield loop" collapses. The company can't raise fresh capital anymore, which forces it to sell Bitcoin to cover its debts. That could trigger a broader market meltdown.
A Market Running on Fumes
Schiff also pointed out that Bitcoin hasn't rallied despite what should have been a perfect storm of good news: spot ETFs, a crypto-friendly president, and strong political backing. In his view, that's a sign the market is tapped out. He believes whales used all the hype to exit their positions while retail investors bought at the top.
The result? A market dominated by leveraged, weak-hand buyers who could panic at the first sign of trouble. Schiff thinks this setup is primed for a rapid collapse unless the government steps in.
Crypto Bigger Than Dot-Com, But Built on Nothing
Schiff compared the current crypto boom to past speculative bubbles, calling it larger than the dot-com mania but "built on nothing." He sees AI as a real technology that's overheated and will shake out before reshaping the economy. Crypto, on the other hand, will see most assets go to zero, with tokenized gold as the only blockchain application with staying power.
His bottom line? Every company running a Bitcoin or Ethereum treasury strategy will eventually go insolvent because they're betting on speculative enthusiasm instead of building actual revenue engines.