- Peter Schiff warns Strategy’s STRC Bitcoin funding model may face legal risk and investor lawsuits.
- Critics question the sustainability of 11.5% yields as the strategy expands BTC holdings through aggressive issuance.
- Despite scrutiny, Strategy holds 780,897 BTC and continues expanding exposure under Saylor’s strategy.
Rising scrutiny surrounds Strategy’s Bitcoin funding model after economist Peter Schiff warned of potential legal risks. Schiff criticized the firm’s use of STRC preferred stock, arguing the structure could mislead investors. His comments come as Michael Saylor continues to promote the company’s Bitcoin acquisition strategy.
“It’s so misleading to constitute fraud. Get ready for the lawsuits when the dividends are cancelled and the stock craters,” Schiff said in a post on X. The remarks add to the ongoing debate over how companies finance large Bitcoin holdings, especially through yield-based instruments.
Funding Strategy Faces Scrutiny
Strategy relies on its STRC perpetual preferred stock to fund ongoing Bitcoin purchases. The instrument targets a $100 par value and pays monthly dividends, with an annualized yield near 11.5%.
However, experts have raised questions about the sustainability of those payouts. The company also expanded capital through earlier common stock dilution, adding pressure to its funding structure.
Despite the scrutiny, Michael Saylor has continued to increase Bitcoin exposure. Strategy recently acquired 23,934 BTC worth about $1.76 billion. The purchase brings total holdings to 780,897 BTC, valued at nearly $59 billion.
Saylor has dismissed criticism of the strategy. “If this makes you uncomfortable, it’s working,” he said.
Market Context and Diverging Narratives
Peter Schiff has long favored gold over Bitcoin and has recently urged investors to reduce crypto exposure near the $75,000 level. He also advised shifting funds into gold and silver, citing expectations of U.S. dollar weakness.
However, gold has shown mixed performance in 2026. Prices turned volatile, including a March decline of more than 13%. Some analysts now say the metal has traded more like a risk asset than a traditional haven.
Meanwhile, Bitcoin has strengthened and moved above $77,000. The price recovery has returned Strategy to a profit position, based on its average purchase price of $75,577. The company also reported a 5.6% Bitcoin yield year-to-date.
Related: Crypto Capital Shifts to Stablecoins as Risk Appetite Falls, Market Cap Tops $320B
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