Renowned Economist Peter Schiff Challenges MicroStrategy Inc.'s MSTR Co-Founder Michael Saylor's Bitcoin Argument

Renowned economist Peter Schiff challenged MicroStrategy Inc.'s MSTR co-founder Michael Saylor's argument that Bitcoin's scarce supply would continue to drive its price higher.

Renowned economist Peter Schiff has challenged MicroStrategy Inc.’s (NASDAQ:MSTR) co-founder Michael Saylor's argument that Bitcoin's (CRYPTO: BTC) price will continue to rise due to its limited supply.

What Happened: Schiff, who is known for his bearish stance on Bitcoin, acknowledged the cryptocurrency's deflationary nature in an X post on Tuesday. However, he maintained that deflation is only beneficial when there is robust demand and existing holders are not selling.

“But when the supply of new buyers runs low and those who own it want or need to sell it, the lack of new demand causes the price to crash,” Schiff asserted.

Yes, #Bitcoin has a limited supply. As long as more people want to buy it, but those who already own it don't sell, the price goes up. But when the supply of new buyers runs low and those who own it want or need to sell it, the lack of new demand causes the price to crash.

— Peter Schiff (@PeterSchiff) August 2, 2023

When pointed out by other X users in response that what he stated was obvious, Schiff clarified that his statement was in response to Saylor's justification for buying Bitcoin due to scarcity. “But he ignores what happens when demand is scarce,” Schiff added.

On a counter-question to what would happen if gold doesn't have adequate demand, Schiff said, “There will always be demand for gold. Gold is a metal that will always be needed. There will not always be demand for Bitcoin.”

Schiff's remarks provided a counterpoint to Saylor's bullish stance on Bitcoin. Saylor has spoken at length about the success of MicroStrategy's Bitcoin-focused approach, which he claimed has generated an annual return of 44% on average since August 2020, compared to the S&P 500's 12% annual return.

A longtime critic of Bitcoin's supposed lack of utility, Schiff recently said that he would reconsider his pessimism about the leading cryptocurrency if it became a mainstream payment medium.

At the time of writing, Bitcoin was exchanging hands at $56,726.91, up 0.08% in the last 24 hours, according to data from Benzinga Pro.

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