Peter Schiff, a vocal Bitcoin critic, is again raising concerns about Strategy Inc.'s (formerly MicroStrategy) Bitcoin strategy, warning that the company's approach could lead to a "death spiral". Schiff's argument centers on Strategy's increasing reliance on issuing preferred shares (STRC) to fund its Bitcoin purchases. These shares carry a hefty 11.5% yield, and Schiff contends that sustaining this payout requires continuous capital raises and stronger Bitcoin performance.
Schiff argues that Strategy's business model is flawed because it depends on an endless stream of new investors buying STRC. He suggests that if Bitcoin's price doesn't appreciate sufficiently, Strategy might be forced to sell its Bitcoin holdings to cover the dividend payments. This, in turn, could put downward pressure on Bitcoin's price, creating a "death spiral" scenario. Schiff has been a long-time critic of Bitcoin, and has warned that MSTR will eventually go bankrupt.
Strategy executives have defended their approach, arguing that Bitcoin's long-term potential justifies the strategy. The company has amassed a substantial Bitcoin treasury, holding 815,061 BTC as of April 2026, surpassing BlackRock's IBIT to become the world's largest Bitcoin holder. The company is aiming for 1 million BTC by the end of 2026.
Despite Schiff's concerns, Strategy continues to aggressively accumulate Bitcoin, utilizing common stock sales and preferred share issuance to fund its purchases. Whether Strategy can maintain this pace depends on continued access to capital and favorable Bitcoin market conditions. In the meantime, Strategy's stock remains well below its previous highs, despite Bitcoin's recovery.
