Peter Schiff calls Strategy a Ponzi after $216M BTC sale
Peter Schiff has renewed his criticism of Strategy after the company sold part of its Bitcoin reserve to fund dividend payments.
Summary
- Peter Schiff attacked Strategy’s new model after its $216 million Bitcoin sale for dividend payments.
- Strategy still holds 843,775 BTC and $2.55 billion in U.S. dollar reserves after selling.
- Bitcoin held near $63,369 as traders weighed Strategy’s sale, dividend needs, and market support.
In a July 7 post on X, Schiff called Strategy’s current structure a “mid-cycle Ponzi.”
Schiff said the company has moved away from its earlier model of issuing stock and debt to buy Bitcoin. He argued that the new model depends on selling Bitcoin to pay interest, dividends, debt costs, and possible buybacks.
Strategy sells BTC for dividends
The criticism followed Strategy’s latest Bitcoin sale. As reported yesterday, Strategy sold 3,588 BTC for about $216 million to fund dividends tied to its Digital Credit securities.
After the sale, Strategy said it still held 843,775 BTC and $2.55 billion in U.S. dollar reserves. The sale drew market attention because Strategy remains the largest publicly traded corporate Bitcoin holder and has long been linked to Michael Saylor’s buy-and-hold message.
Dividend structure draws fresh scrutiny
Schiff said Strategy’s preferred stock structure could create pressure if prices fall and yields rise. He pointed to STRC and said a weaker price may force the company to raise dividends to support demand.
That concern centers on Strategy’s new funding structure. As previously reported, the company authorized up to $1.25 billion in Bitcoin sales under its Digital Credit Capital Framework.
The framework allows proceeds to support cash reserves, preferred dividends, debt costs, and buybacks. Strategy also raised the STRC dividend rate to 12% and set buyback authority for preferred securities and Class A shares.
Saylor has defended limited sales
Michael Saylor has defended the company’s ability to sell limited amounts of Bitcoin without leaving its broader accumulation strategy. Saylor said the goal is to avoid becoming a net Bitcoin seller rather than follow an absolute “never sell” rule.
Saylor also said any future sale would be part of a larger capital plan. “Even if we were to sell one Bitcoin, we’d be buying 10 to 20 more Bitcoin,” he said in earlier comments about the company’s treasury model.
Bitcoin price holds near $63K
Bitcoin traded near $63,369 at the latest check, after moving between $61,350 and $64,435 during the session.Strategy stock traded near $100.77, giving the company a market cap of about $33.65 billion.
Schiff warned that Bitcoin could face more pressure if Strategy sells more coins. He said the $58,000 support level may be at risk and argued that a break could push BTC below $50,000.
The market has not confirmed that view. Earlier today, crypto.news reported that Bitcoin recovered after Strategy’s 3,588 BTC sale, while Bitwise CEO Hunter Horsley said, “Bitcoin wants to be higher.”
Strategy’s model remains under close watch because it connects Bitcoin reserves, preferred dividends, share sales, and market confidence. The next test is whether Bitcoin demand can absorb future sales if Strategy uses more of its approved monetization plan.
