Arthur Hayesco-founder of the cryptocurrency exchange BitMEX and investment director of fonds Maelstromexpressed doubts about the purchasing strategy of Bitcoin (CRYPTO: BTC) de MicroStrategy Inc. (NASDAQ:MSTR), which is based on debt, predicting difficult times for the company when the leading cryptocurrency loses volatility.
What happened : In an interview with Benzinga, Hayes criticized MicroStrategy’s volatility monetization strategy, which involves issuing convertible debt and other fixed-income securities to purchase Bitcoin.
“The reason these instruments are attractive is that the stocks and Bitcoin they buy are volatile,” Hayes said.
Bitcoin has been on a record bull run, rising nearly 50% over the past three months, helped by Bitcoin’s presidential victory. Donald Trump. The rally led to extreme upward volatility in MicroStrategy’s stock from Michael Saylorbetter known for its Bitcoin wallet than its core software business. The stock is up 62% over the past three months.
However, Hayes warned that things could change. “When Bitcoin volatility decreases, most likely after a major crisis, it will become difficult for MSTR to attract the interest of these types of investors. At this point, the game will be over.”
The Bitcoin optimist said he wouldn’t sell MSTR stock at all, saying there are “better” ways to bet up or down on Bitcoin.
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Why it matters : Hayes’ comments add to growing concerns around MicroStrategy’s Bitcoin purchases.
-The famous economist Peter Schiff previously said the company’s commitment to reimbursing holders of convertible securities could pose a potential risk if the value of Bitcoin fell significantly.
Martin Shkrelibetter known as “Pharma Bro,” even went so far as to call the strategy a “bubble,” adding that he was betting down on MicroStrategy.
However, Anthony ScaramucciCEO of the investment company SkyBridge Capitalhas supported this strategy, saying the narrative that Bitcoin’s declines will force the company to liquidate its reserves is exaggerated.
Price movement : At the time of writing, Bitcoin was trading at $93,573.37, down 0.90% over the past 24 hours, according to data from Benzinga Pro.
MicroStrategy stock closed up 1.14% at $327.91 during Friday’s regular session. The stock has a consensus price target of $449.5 based on ratings from 12 analysts, with an average price target of $546.67 from Bernstein, TD Cowen et Barclays.
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