Michael Saylor rejected claims that Strategy's Bitcoin (BTC) credit model resembles a Ponzi scheme, arguing the firm monetizes BTC capital gains to fund its STRC dividends.
Saylor Pushes Back On Schiff
Saylor addressed the market reaction in an interview shared via X on May 9, days after Strategy's first-quarter earnings call. The chairman said the company could sell Bitcoin to fund dividends on its STRC preferred instrument if needed.
That comment broke from Saylor's long-standing "never sell your Bitcoin" mantra.
He told viewers a more precise framing is that Strategy never intends to be a "net seller" of Bitcoin.
The pushback responded to Peter Schiff and other critics, who argued that any willingness to sell Bitcoin for dividend payments exposed weakness in the structure. Saylor rejected that framing. He said the company's roughly $65 billion in Bitcoin holdings should be treated as a real asset by credit rating agencies, not valued at zero.
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The 2.3% Math Behind STRC
Saylor described the core mechanism as a credit-backed capital investment in digital assets. Strategy issues credit, buys Bitcoin, and expects long-term appreciation to outpace the cost of the dividend.
He compared the structure to a real estate developer that raises capital through credit, improves the land, then monetizes the gains.
The capital investment, he argued, accretes faster than the dividend obligation over time.
According to his own math, Bitcoin needs to appreciate just 2.3% annually for Strategy to cover STRC dividends indefinitely without selling common equity. Strategy sold $3.2 billion of STRC in April, while monthly dividend payments run roughly $80 million to $90 million.
In that scenario, Saylor said, the company would effectively be "buying 30 Bitcoin and selling one Bitcoin," remaining a net accumulator across any meaningful time frame.
Why The Reversal Spooked Markets
The Q1 earnings call already shook investors before Saylor's follow-up interview. Strategy reported a $12.5 billion net loss for the quarter, driven by mark-to-market adjustments on its Bitcoin holdings as the asset fell.
MSTR stock dropped more than 4% after hours following the original disclosure, and Bitcoin slipped below $81,000. The firm now holds 818,334 BTC at an average cost near $75,537, against annual dividend obligations of roughly $1.5 billion across STRK and STRC.
At press time, Bitcoin traded around $80,750, after briefly crossing the $81,000 line earlier this month for the first time since January.
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