Bitcoin and Ethereum: A Risky Bet for Business?

Peter Schiff, a well-known economist, has raised concerns about companies that hold Bitcoin or Ethereum as part of their treasury strategy. He argues that these companies lack a solid business model. Schiff points out that companies like Strategy rely heavily on Bitcoin. They do not generate much profit. Instead, they take on more debt or issue new shares to buy more Bitcoin. This approach, according to Schiff, is unsustainable. He believes that if the company's stock value falls below the value of its Bitcoin holdings, it will face serious trouble. At that point, the company may have to sell its Bitcoin to cover its debts. This could lead to a broader market crash. Schiff also notes that Bitcoin has not seen a significant rally despite positive news. He suggests that this lack of growth indicates a weak market. He believes that large investors have already cashed out, leaving smaller investors holding the bag. He compares the current crypto market to past speculative bubbles. He argues that the digital asset boom is built on thin air. In contrast, he sees AI as a real but overheated sector that will eventually stabilize and reshape the global economy. Schiff predicts that most crypto assets will ultimately lose their value. He believes that tokenized gold could be the only sustainable application of blockchain technology. In conclusion, Schiff warns that companies relying on Bitcoin or Ethereum will eventually face financial trouble. Their business models depend too much on speculation rather than real revenue.