Strategy’s Bitcoin bet is facing a new test as fresh criticism from economist Peter Schiff warns that the company’s latest purchases may be diluting shareholders. At the same time, CryptoQuant CEO Ki Young Ju has also argued that a prolonged sideways market could do more damage than a crash for the company’s Bitcoin bet.
The current debate matters because Strategy has become the most-watched corporate Bitcoin holder on the market. Unlike other companies, its preferred stock, STRC, is designed to fund more Bitcoin buying while paying income-focused investors a floating dividend. This move has closely tied the performance of the stock to that of Bitcoin. However, as STRC has drifted below par and the Bitcoin price has declined, these market experts are saying that the Bitcoin structure is being stress-tested in real time.
Schiff Says The Bitcoin Buying Is No Longer Helping Shareholders
The first line of criticism comes from economist Peter Schiff, a popular Bitcoin critic, who has long argued that BTC is a weak treasury asset and that Strategy’s capital-raising model only works when the company’s stock trades at a premium. In recent posts and interviews, Schiff has clearly stated that Strategy’s newer share sales appear to be creating less value per share than earlier rounds, because the company is issuing equity without the same valuation cushion it once had. This latest criticism comes after Strategy revealed that it had facilitated a new purchase of roughly 1,550 BTC funded through equity issuance.
Strategy announced in a June 8 press release that shareholders approved moving STRC dividends from monthly to semi-monthly payments. The company said the change was intended to stabilize pricing, improve liquidity, and support demand for the preferred stock. However, this has not cleared doubts, as critics believe that there needs to be some major change that will signal that the market is no longer behaving as planned.
Schiff’s broader argument is that Strategy is now leaning on a more expensive and more dilutive funding setup than before. When the stock trades below net asset value, the economist says, each new issuance can reduce the amount of Bitcoin exposure common shareholders receive per share. As a result, Schiff believes that what Strategy is doing only ends up being a “negative Bitcoin yield” for common equity holders.
Schiff’s comments do not question whether Strategy can still buy Bitcoin. The concerns being raised are as to whether these Bitcoin buys will still continue to grow as they have in the past after factoring in dilution, dividend obligations, and the cost of keeping STRC near its target range to keep investors happy.
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BTC And STRC Face A Narrative Problem
Peter Schiff is not the only market expert who has questioned Strategy’s Bitcoin bet. CryptoQuant CEO Ki Young Ju’s criticism might be different, but it also raises an important question for the company. The CryptoQuant CEO argued on X that Bitcoin’s biggest risk is not a sharp collapse, but “boredom.” This simply refers to a period of time when the Bitcoin price suffers a decline that sucks the liquidity out of the market, sending sentiments crashing into the negative.
Ju’s view is as important as Schiff’s because it calls into question Strategy’s choice to move toward a plan that focuses mainly on the belief that the Bitcoin price will rise. The company is essentially betting that Bitcoin, a digital asset, will continue to draw more investment and rise, even though it is not tied to any company or government.
Ju explained that the old storylines for BTC have already been used up. For example, the “digital gold” pitch has come and gone. Next was the institutional adoption through spot Bitcoin ETFs, which seems to have mainly died out after the 2024-2025 rally.
In what seems to be a last ditch effect, Strategy and its founder, Michael Saylor, seem to be leaning into the idea of BTC being “digital credit” as a new way to package Bitcoin exposure for yield-seeking investors. However, the CryptoQuant CEO is skeptical as to whether this digital credit narrative is as compelling as its predecessors to trigger a new wave of capital injection.
At the current Bitcoin price of around $63,000, Strategy is already recording losses on its BTC holdings. The company’s 846,842 BTC holdings were purchased at an average price of $75,565, according to data from its official website. This means that the company is now down more than $10 billion as its holdings cost $64.07 billion and is now sitting at $53.58 billion at current market prices.