Michael Saylor, cofounder and executive chairman of MicroStrategy, is facing some tough questions after cosigning on the idea that the U.S. government should buy Bitcoin in quantity matching its substantial gold reserves.
This idea, first put forward by Robert F. Kennedy Jr., was shared by Saylor on social media, prompting some raised eyebrows and criticism from prominent crypto skeptic Peter Schiff.
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Schiff, who is well known for being a gold advocate and a vocal critic of Bitcoin in the same measure, has accused the MicroStrategy CEO of indirectly seeking a government bailout for Bitcoin. He says that Saylor knows the main cryptocurrency is losing its value and wants the U.S. government to step in and buy it, effectively putting American taxpayers at risk in what he calls a "pyramid scheme."
Ironically, @saylor is looking for a government #Bitcoin bailout. He knows the Bitcoin blockchain letter is running out of chain and wants the U.S. government to become the buyer of last resort, leaving American taxpayers as the ultimate bag holders in the Bitcoin pyramid scheme.
— Peter Schiff (@PeterSchiff) July 26, 2024
In Schiff's view, a pyramid scheme emerges when people are recruited to join by others who are already in the scheme. The money is taken from newer members to pay returns to those who have been in the scheme longer.
Is Bitcoin really a Ponzi scheme?
Schiff says that Bitcoin fits this model because it does not have any intrinsic value or productive use. This is different from traditional investments like stocks, real estate, bonds or commodities like gold, which are valued for their tangible uses and potential yields, concludes Schiff.
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Michael Saylor himself has not said publicly that he wants a bailout, but his social media activity has gotten people talking. If the U.S. government were to accumulate Bitcoin until its holdings equate to the nation's gold reserves, it would need to purchase approximately 9.4 million BTC at current prices. This would be almost 45% of the total Bitcoin supply that will ever be mined.
