Bitcoin Critic Peter Schiff Calls Strategy an “Obvious Ponzi,” Targets SEC Oversight

• Schiff calls the $STRC structure a Ponzi and questions SEC oversight of its ongoing promotion.
• $STRC dividend yield of 11.5% seen by Schiff as the main driver over Bitcoin exposure.
• Schiff warns Strategy funding model could lead to dilution or forced Bitcoin sales.

Bitcoin critic Peter Schiff has intensified his criticism of Strategy’s $STRC perpetual preferred stock, calling it an “obvious Ponzi” scheme and questioning the role of U.S. regulators. His remarks come as the stock shows signs of recovery toward its $100 par value, coinciding with a 9.39% rise in MSTR shares on Wednesday and renewed analyst optimism around the company’s outlook.

Schiff’s latest comments add to a long-running dispute with Strategy executive chairman Michael Saylor. In a post on X, Schiff argued that STRC’s structure relies heavily on attracting investors through its advertised 11.5% annual dividend, which is distributed monthly. According to him, the yield component is driving investor interest more than Bitcoin exposure.

He stated that while some investment risks may not be immediately apparent, $STRC stands out as a case he considers unusually clear. Schiff also criticized the U.S. Securities and Exchange Commission, asserting that the regulator has allowed continued promotion of the product without intervention. He further hosted two discussions on X Spaces, inviting participants to counter his claims.

Concerns Over Funding Model and Dilution Risk

In addition to his critique of $STRC, Schiff has raised concerns about Strategy’s broader capital strategy tied to Bitcoin accumulation. He noted that the company has shifted from issuing common stock at a premium to relying more on higher-cost instruments, such as preferred shares, which offer elevated yields.

Related: Peter Schiff Warns Bitcoin ‘Collapse Is Inevitable’ as Strategy Buys $2.54B More BTC

According to Schiff, the company’s software business does not generate sufficient earnings to support these financial obligations. He outlined a scenario in which the firm may need to issue additional preferred shares, sell discounted equity, or liquidate Bitcoin holdings to meet dividend commitments. He indicated that such actions could result in shareholder dilution or pressure on the company’s balance sheet.

Schiff previously warned of potential legal consequences if $STRC dividends are reduced or discontinued and the stock price declines. His position has also been echoed by Canadian investor Frank Giustra, who described the debt-driven Bitcoin acquisition strategy as vulnerable under broader economic stress.

Related: Schiff Warns Strategy BTC Model Could Trigger Fraud Lawsuits