While Strategy (MSTR) shares show a confident rise, reaching the $137.4 mark amid bitcoin's recovery above $80,000, Peter Schiff is sounding the alarm once again. The well-known skeptic of the first cryptocurrency predicts an inevitable collapse for Michael Saylor's company, which he describes as a "death spiral."
Schiff, who has been criticizing Strategy's business model for years, claims that the current stock rally is not a sign of market confidence, but merely a result of forced short covering. According to his logic, traders who bet on MSTR's decline were forced to buy shares back, which triggered the rally. He sees neither real demand nor long-term investor faith in the company's strategy in this.
Dividend trap or sustainable model?
Schiff's main argument is the vulnerability of Strategy's financial structure. In his view, dividend obligations on preferred shares could become an unbearable burden if bitcoin starts to depreciate. He has repeatedly emphasized that payments are partially financed through the issuance of new shares, making the scheme extremely fragile. Any significant drop in BTC, Schiff believes, could trigger a cascade of problems that would ultimately collapse MSTR's value.
Michael Saylor, for his part, responds to criticism with his usual dose of irony. His answer was a short video generated with AI, where he confidently sits atop a bull. This image is a direct reference to his unwavering belief in bitcoin's growth and, consequently, in the success of his own company. Saylor continues to publicly demonstrate optimism, leaving no doubt about his position.
The observed conflict is a classic clash of two worldviews. Schiff assesses the situation through the lens of traditional finance, seeing in Strategy only a fragile pyramid built on a volatile asset. Saylor, meanwhile, positions himself as a visionary building the future on digital gold.
My view: Schiff's warnings are not without merit, especially regarding the risks associated with the dividend burden. However, as long as bitcoin maintains its upward trend, MSTR has every chance to continue growing. The key question is not whether the "death spiral" will work in principle, but whether the market can survive another deep correction cycle without undermining faith in Saylor's strategy.