Distinguished economist Peter Schiff has once again expressed his concerns over the Bitcoin acquisition strategy of Strategy Inc., led by Michael Saylor. Despite the descending share value of the company, Schiff emphasizes the negative effects this strategy has on shareholder value due to the dilution it causes.
An 85% Decline in BTC Premium
Peter Schiff recently shared his views regarding Strategy Inc.’s choice to invest heavily in Bitcoin, under the leadership of Saylor. This has occurred in the context of a falling share price and Net Asset Value (NAV) premium for the company. Schiff highlighted that despite the company’s reliance on Bitcoin, it has not been performing well.
“Saylor claimed to have achieved a Bitcoin yield of 6.9% in the course of 2025 thanks to his extensive purchases. However, Strategy Inc.’s share price is down by 6% during the same period,” Schiff commented.
Schiff further claimed that the significant dilution the company experienced led to an 85% reduction in the premium on its crypto holdings, consequently reducing the value to shareholders.
A Bitcoin enthusiast responded to Schiff’s comment, agreeing with Schiff’s critique of Strategy Inc. but questioning the claim of an 85% drop in premium. He argued that the calculation seemed inaccurate, asserting that the premium had decreased, not collapsed.
Debt Financing the Core of the Dispute
Schiff’s skepticism towards Strategy Inc.’s Bitcoin acquisition strategy is mainly due to the firm’s decision to fund these purchases through debt. He has frequently criticized this strategy, suggesting that relying heavily on debt could be risky if Bitcoin prices fall.
“The recent convertible notes from Strategy Inc. weren’t well received, with shares dropping 4.5% today, even with Bitcoin increasing 2.5%,” Schiff mentioned.
Over time, Schiff has consistently advocated against debt-driven Bitcoin purchases, stressing the dangers if Bitcoin prices were to decline. He added that if the company began trading at a discount to its holdings, they could face difficulties as selling shares to purchase crypto could lead to a negative Bitcoin yield.
The Controversial BTC Acquisition Approach
Strategy Inc’s Bitcoin acquisition approach has been the target of substantial criticism. Regardless, the company continues to accumulate digital currencies. Recently, Strategy Inc. reported that it had acquired an additional 20,356 Bitcoins, worth approximately $1.99 billion. This acquisition brings their total Bitcoin holdings to 478,740 coins, equivalent to around $44 billion.
Frequently Asked Questions (FAQ)
Why is a debt-financed Bitcoin acquisition strategy considered risky?
A debt-financed Bitcoin acquisition strategy is considered risky due to the volatile nature of Bitcoin prices. If the price of Bitcoin drops significantly, the company may struggle to repay its debt and sustain profitability.
What impact does shareholder dilution have on a company?
Shareholder dilution causes a diminution of each investor’s ownership in the company, reducing their entitlement to profits and control over company decisions. It can also lead to a decline in share prices.
How does the decrease in premium affect the shareholders?
A decrease in the premium on a company’s holdings reduces the potential return on investment for shareholders. The lower the premium, the smaller the potential gain for investors.
What should a company consider before deciding on a Bitcoin acquisition strategy?
A company should consider the financial stability of its operations, market volatility, and the potential impact on shareholder value before deciding on a Bitcoin acquisition strategy. It is also crucial to ensure a sustainable debt profile and consider the effects of possible price fluctuations on the company’s financial health.
