Financial markets commentator Peter Schiff criticized on Tuesday Michael Saylors comparison of MicroStrategy Inc.‘s (NASDAQ:MSTR) debt-financed Bitcoin (CRYPTO: BTC) Manhattan real estate purchasing strategy.
What happened: In an X post, Schiff disagreed with Saylor’s analogy. “Real estate generates rents, which can be used to service and pay down debt. Bitcoin does not generate income to make interest or principal payments,” he argued.
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Spencer Hakimianhedge fund founder Tolou Capital Managementrefuted Schiff’s position, stating that unlike the Manhattan real estate industry, Bitcoin has no fees or maintenance.
Schiff responded that real estate rental prices are higher than costs.
The city’s rental market is bucking national trends, with the top 50 markets experiencing 15 consecutive months of rent declines. In October 2024, New York’s average asking rent rose 1.7% year over year to $3,374, a 13.1% increase over pre-pandemic values. According to Realtor.com, Manhattan’s average monthly rent at the time of writing was $4,750.
Related: It’s No Wonder Jeff Bezos Owns More Than $70 Million in Art — this alternative asset has outperformed the S&P 500 since 1995, with an average annual return of 11.4%. Here’s how regular investors get started.
Why it matters: This criticism comes after Saylor defended MicroStrategy’s Bitcoin acquisition strategy by equating it to the Manhattan real estate industry. He said that just as developers in Manhattan issue more debt to develop more real estate as its value rises, MicroStrategy is capitalizing on Bitcoin’s high returns to buy more Bitcoin.
