Michael Saylor has pushed back against criticism of Strategy’s Bitcoin-backed capital model after the company’s STRC preferred stock fell below its $100 par value. In a June 20 post on X, Saylor said Strategy’s Bitcoin and cash reserves now exceed its outstanding debt by about $48 billion. He also said the company has raised more than $60 billion in additional capital since 2022 and used those funds to buy Bitcoin.
Saylor points to the 2022 drawdown as a contrast
To frame the current debate, Saylor compared Strategy’s present balance sheet with its position during the 2022 crypto bear market. At that time, the company held around 130,000 BTC, worth roughly $2.6 billion when Bitcoin traded near $20,000. After Bitcoin dropped below $16,000, Strategy’s debt temporarily exceeded the combined value of its Bitcoin and cash holdings by about $300 million. Over the same period, MSTR shares fell from about $24 to the $13 range on a split-adjusted basis.
Saylor said the company stayed on course through that period and kept executing its strategy. Since then, he said, Strategy has added more than 716,000 BTC after raising fresh capital.
STRC weakness revives scrutiny of the funding model
The latest drop in STRC has reopened questions about whether Strategy’s financing structure can keep functioning under pressure. Bitcoin critic Peter Schiff raised the temperature by suggesting investors could pursue legal action against both Strategy and Saylor. He also argued that Saylor may have crossed SEC marketing rules in the way he promoted the preferred stock offering.
That criticism has widened the discussion beyond the price of a single security. The core issue now is whether the company may eventually need to change how it funds itself, and whether Bitcoin sales could become part of that process.
Some market participants see Bitcoin sales as the clearest outlet
Arca Chief Investment Officer Jeff Dorman has suggested that Strategy might ultimately need to sell between $3 billion and $4 billion worth of Bitcoin to reduce capital structure pressure and support STRC holders. He assigned that outcome a 25% probability. His base case, carrying a 70% probability, is that the company keeps selling small amounts of MSTR stock instead. Under that scenario, Bitcoin holdings would remain mostly intact, but common shareholders could face more downside.
Liquidity has become part of the discussion as well. Market maker QCP previously estimated that Strategy’s available resources could cover preferred dividend obligations for about seven and a half months. QCP said that if current funding channels become less attractive, the company may need alternative sources of financing, with Bitcoin sales remaining one possible option.
Backers reject Terra comparisons
Supporters of Strategy and Bitcoin have publicly challenged the recent criticism. Fox and Sky News contributor David Gokhshtein said on X that Bitcoin’s market value cannot be pinned on a single person. He rejected attempts to blame Saylor for broader market moves and dismissed comparisons between Strategy and the collapsed Terra ecosystem.
Those comparisons gained traction after crypto analyst Ali Martinez suggested similarities between STRC and Terra’s LUNA token structure. In response, Bitcoin advocate Samson Mow called STRC a “brilliant instrument” and said he does not see a structural flaw in the security unless investors believe Bitcoin will fail to appreciate over the long term.