Euro Pacific Capital CEO Peter Schiff has slammed Strategy's latest Bitcoin acquisition, arguing that the company's funding model no longer delivers the same shareholder benefits as in previous years.
From Premium to Discount: A Structural Shift
Schiff noted that Strategy's earlier Bitcoin accumulation succeeded largely because its stock traded at a significant premium to the net asset value of its Bitcoin holdings. During those periods, issuing new shares raised substantial capital without diluting per-share Bitcoin exposure. However, market conditions have reversed. With Strategy's stock now trading below its net asset value, the company must issue more shares to raise the same amount of capital, which effectively reduces the amount of Bitcoin backing each share.
Schiff applied this logic to Strategy's recent purchase of 1,550 Bitcoin for roughly $101 million. He claimed the funding came from discounted stock sales, diluting existing shareholders. The increase in outstanding shares outweighed the proportional gain in Bitcoin holdings, producing what he called a negative Bitcoin yield for investors.
Market Moves Compound the Damage
Shortly after the acquisition, Bitcoin price declined, leaving the newly acquired coins at an unrealized loss. Schiff estimated the position lost over $6 million in value within days. He also questioned the sustainability of Strategy's broader financing structure, warning that if investor demand for its capital-raising vehicles weakens, management may face greater pressure when seeking funds for future purchases.
Rather than issuing more stock to buy Bitcoin, Schiff argued that buying back discounted shares would be a more logical use of capital under current conditions, delivering greater value to shareholders.
Debate Over Strategy's Bitcoin Treasury Model Intensifies
Schiff's criticism adds fuel to the ongoing debate around Strategy's Bitcoin treasury strategy. While supporters remain confident in the long-term upside of the company's accumulation plan, critics focus on the dilutive impact of stock sales conducted below net asset value. The core question: when shares trade at a discount, does issuing equity to buy more Bitcoin create or destroy value? As of press time, Strategy had not publicly responded to Schiff's remarks.