Vocal cryptocurrency critic and gold advocate Peter Schiff has labelled digital asset treasury Strategy company's evolving business model a "mid-cycle Ponzi."
Schiff has slammed the company's move to sell parts of its Bitcoin reserves in order to fund dividend payments and service corporate debt.
A 'completely different business model'
During the initial phases of the company's Bitcoin accumulation, Michael Saylor's firm issued convertible debt and sold stock to purchase the digital asset. Now, Schiff notes, the flow of capital has reversed.
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"Strategy now has a completely different business model," Schiff stated. "Instead of selling common and preferred stock and issuing debt to buy Bitcoin, the new strategy is to sell Bitcoin to pay interest and dividends, pay off debt, buy back shares it sold, and hope that Bitcoin’s price goes way up."
He pointed out that Strategy spent roughly $17 billion purchasing Bitcoin since October 2025. Yet, the asset's price still experienced severe drawdowns. "If Bitcoin was that weak with Strategy buying $17B, imagine how much weaker it will be with Strategy selling $3.25B, plus more to maintain its minimum U.S. dollar reserve," he warned.
The dividend spiral
According to Schiff, the current yield on $STRC has spiked to roughly 15% due to price depreciation. "That means to get the price back up to $100, Strategy must raise the dividend rate," Schiff explained.
Schiff believes this creates a negative feedback loop: declining preferred stock prices force higher dividend payouts, which in turn require heavier Bitcoin liquidations. This ultimately puts even more pressure on the asset's price.
Looming downside risks
Schiff predicted that Bitcoin's technical support levels are in jeopardy due to fresh selling pressure.
The analyst believes that the $58,000 support level might now hold. "Once it gives way, Bitcoin could collapse below $50,000, testing the August 2024 low," he projected.