Renowned economist Peter Schiff questioned the soaring market capitalization of Bitcoin (CRYPTO: BTC) proxy company MicroStrategy Inc. (NASDAQ:MSTR) compared to gold mining companies.
What Happened: In a recent X post, Schiff pointed out that MicroStrategy, despite not earning or producing much, has a market valuation exceeding all gold mining companies except for Newmont Corporation (NYSE:NEM), the largest in the sector.
Schiff even initiated an X poll, asking his followers if MicroStrategy's market cap will eventually surpass Newmont's. As things turned out, more than 83% voted in favor of such an outcome.
As of this writing, MicroStrategy has a market cap of $47.764 billion, narrowly trailing Newmont, which was valued at $54.42 billion. Since the beginning of the year, shares of MicroStrategy have popped an impressive 276.9%, while the gold-mining company has grown by 16.84% year-to-date.
The short-term performance also favors the Bitcoin development company, which jumped 53% over the month compared to Newmont, which fell 10.57% during the same period.
Comparing the technical indicators of the two stocks, all of MicroStrategy's moving averages flashed a 'Buy' signal, while the momentum indicator Moving Average Convergence Divergence, which compares an asset's long-term performance versus short-term, was also bullish, according to TradingView.
On the other hand, Newmont's moving averages all indicated a 'Sell' signal, implying a bearish condition.
Why It Matters: This wasn't the first time Schiff has expressed skepticism towards MicroStrategy. Last week, he predicted a crash for the company, terming it the most overvalued stock in the MSCI World Index. "When it finally crashes, that's gonna be the real bloodbath!" he said.
Powered by the Bitcoin strategy, MicroStrategy under Michael Saylor has outperformed many top players on Wall Street. With year-to-date gains of 272%, it netted higher returns this year than the "Magnificent 7" companies
As of this writing, the company held over $18 billion in Bitcoin on its books, according to bitcointreasuries.net.
Price Action: At the time of writing, Bitcoin was exchanging hands at $72,477.89, up 2.20% in the last 24 hours, according to data from Benzinga Pro. Bitcoin's rally boosted shares of MicroStrategy up 1.14% to $258.24 on Tuesday.
Photo Courtesy: Wikimedia Commons
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