Peter Schiff, a long-time gold advocate and Bitcoin critic, has renewed his attack on Michael Saylor's Strategy (formerly MicroStrategy), warning that the firm's latest funding approach using high-yield preferred shares places its Bitcoin accumulation plan under severe pressure.
Schiff focused on the preferred shares, which carry an annual yield of 11.5%. He argued this creates a large fixed cost for Strategy as it continues raising funds to buy more Bitcoin. While supporters of the firm argue that Bitcoin only needs to rise 2% per year to cover the preferred dividend, Schiff countered: “The more STRC/MSTR sells, the more BTC must rise to cover the yield.” He noted that each new preferred share sale increases the required Bitcoin appreciation threshold.
No Normal Earnings, Bitcoin Sale Risks Mount
Schiff stressed that Strategy lacks ordinary corporate earnings to easily fund these dividends. This could force the company to raise more capital or resort to selling Bitcoin. A forced sale, in his view, would create a vicious cycle: selling Bitcoin lowers its price, weakening Strategy’s balance sheet. If preferred shares fall in value, the company might have to offer even higher yields to attract buyers, further raising funding costs and straining its capital structure.
“The only way to stop the death spiral is for MSTR to cancel the dividend,” Schiff said. But he acknowledged that such a move would hurt STRC, MSTR, and Bitcoin prices alike.
Saylor's Bitcoin Strategy Under New Scrutiny
Michael Saylor has built Strategy into one of the world’s largest corporate Bitcoin holders through years of debt issuances, equity sales, and various instruments. Schiff pointed out on April 18 that Strategy can no longer easily sell common shares at a premium. He claimed the company may need to sell more preferred shares, discounted common stock, or even Bitcoin to meet its obligations.
The warning reignites the debate around Strategy’s Bitcoin treasury model. Supporters see it as a long-term arbitrage bet; critics argue rising funding costs could backfire if Bitcoin prices weaken. The market is now watching closely for Strategy’s next capital move and whether Bitcoin’s price can sustain the preferred dividend burden.