Economist Peter Schiff says Strategy's preferred stock model now threatens both MSTR shares and Bitcoin (BTC) itself.
Schiff's STRC Warning
In posts on X this weekend, Schiff argued that Strategy, formerly MicroStrategy, faces a structural problem with its STRC perpetual preferred stock.
The company holds 815,061 BTC after a $2.54 billion purchase on April 20, financed mostly through equity issuance.
STRC pays a variable 11.5% annualized dividend each month. Bitcoin produces no native cash flow. Schiff says that math forces Strategy into a binary choice between selling BTC to fund payouts or issuing fresh STRC to a shrinking pool of yield buyers.
The instrument has financed roughly 50,792 BTC since launching in July 2025 at a 9% dividend, with seven consecutive monthly increases lifting the rate to 11.5%.
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Saylor Pushback And Context
Strategy president Phong Le pushed back this week, saying the company funds dividends by issuing common equity at a premium to net asset value rather than tapping reserves.
Michael Saylor has cited MSTR's long-run outperformance and the company's $42 billion at-the-market program announced in March, and he has challenged Schiff to debate the structure publicly.
The dispute has escalated steadily. Schiff called STRC the "most obvious Ponzi that has ever existed" on April 23, and he has hosted two X Spaces challenging followers to refute his thesis. TD Cowen analyst Lance Vitanza maintains a buy rating on MSTR with a $385 target.
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