Well-known Bitcoin critic Peter Schiff has once again attacked the business model of Strategy (MSTR), predicting a "death spiral" for the company. His grim forecasts come amid an impressive rally: the company's shares soared to $137.4, moving in sync with the recovery of the leading cryptocurrency, which this week crossed the psychological mark of $80,000 again. While the market celebrates the growth, Schiff sees this not as fundamental strengthening, but merely a temporary effect.
Bearish scenario: manipulation or reality?
Schiff, who has been warning about the fragility of Strategy's structure for months, claims that the current surge in quotes is exclusively the result of forced short covering. According to his logic, traders who bet on a decline were forced to buy shares back en masse, which triggered the rally. He insists: this is not investor confidence in the company's future, but a purely technical factor with no long-term foundation.
The key point of Schiff's criticism is Strategy's dividend policy. The company pays dividends on preferred shares, funding these payments through the issuance of new securities. He calls this scheme "floating" and extremely vulnerable. If the price of Bitcoin begins to decline, the company will face a cascade of problems that could ultimately lead to financial collapse. This is not the first warning: he previously called MSTR shares a "scam" and predicted a crash precisely because of this debt pyramid.
Saylor's response: irony and confidence
Strategy CEO Michael Saylor responded to his opponent's jab with his characteristic audacity. On social network X, he posted a short AI-generated video depicting himself riding a bull, symbolizing relentless market optimism. With this gesture, Saylor demonstrates complete confidence in his strategy and ignores all warnings. Notably, even some analysts who previously expected the company to have to sell off Bitcoin reserves to cover obligations now note a decline in panic sentiment in the market.
The polarity of opinions around Strategy reflects a fundamental divide in the perception of the crypto market. Schiff, as a representative of traditional finance, sees only risk and the fragility of a structure built on a volatile asset. Saylor, in contrast, positions himself as a visionary using debt leverage to accumulate Bitcoin in anticipation of its total dominance.
My view: The truth, as usual, lies somewhere in between. Strategy's model is a bet that Bitcoin will grow faster than the cost of raising capital. As long as BTC is in an uptrend, Schiff's criticism looks irrelevant. However, the "death spiral" will only become a reality if we see a prolonged Bitcoin correction below critical levels. Until then, any talk of collapse is nothing more than emotional swings.