Peter Schiff Says Strategy’s STRC is a Ponzi Scheme: Here’s Why

Technique’s software program enterprise generates income, however Schiff says it falls wanting protecting 11.5% annual dividends throughout STRC’s issuance.

Bitcoin critic Peter Schiff held a dwell audio House on X earlier right now, the place he known as Technique’s most well-liked inventory providing, STRC, “an apparent Ponzi scheme” and invited Michael Saylor and others to show him mistaken.

The area ran for roughly two hours, with Schiff utilizing most of that point to stroll by why he thinks the product will finally depart retail buyers with nothing.

Why Schiff Says the Math Doesn’t Work

Schiff opened the House with a textbook definition:

“A Ponzi, by definition, is when earnings paid out to present buyers comes from bringing in new buyers, and then you definately take the cash from the the brand new buyers and use it to make funds to the outdated buyers,” he stated.

He additionally claimed that Technique has no significant earnings. Sure, its software program enterprise generates some income, however it’s nowhere close to sufficient to cowl the dividend obligations on STRC, which pays holders 11.5% yearly in month-to-month money distributions.

As such, STRC suits that template instantly as a result of Technique raises cash by issuing new shares of the popular inventory, makes use of these proceeds to pay dividends to present STRC holders, after which should subject nonetheless extra shares to pay the subsequent spherical of holders.

“How does STRC make funds when the corporate itself doesn’t have any earnings?” Schiff requested. “The 11.5% yield on STRC is paid by promoting extra shares of STRC, and then you definately get cash from the brand new buyers to pay the outdated buyers.”

Technique has been shopping for Bitcoin aggressively. Final week, it spent $2.54 billion acquiring 34,164 BTC at a mean worth of $74,395, to convey its whole holdings to 815,061 BTC, purchased for roughly $61.56 billion at a mean worth of $75,527.

STRC has been the funding engine for such purchases, with the popular inventory hitting a brand new single-day buying and selling quantity report on April 13, when it introduced in $1.1 billion, an quantity 46.5% above its earlier report and greater than 4 instances its 300-day common of round $274 million.

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Shares May Go to Zero

Schiff identified that Technique has no authorized obligation to maintain paying dividends on STRC since that’s discretionary. Holders can’t power reimbursement and can’t redeem their shares; they will solely promote them. So, if Saylor stops paying, the yields disappear, demand collapses, and the shares go to zero.

“It’s an IOU for nothing,” claimed the gold bug.

The yield itself, he argued, tells the story. It began at 9% when STRC launched in July 2025 and has been raised a number of instances since, sitting at 11.5% since April. In response to Schiff, the demand for STRC retains softening, so the charges preserve climbing to drag in new patrons.

“They preserve jacking it up as the availability of suckers dries up.”

One listener on the House pushed again, saying Technique was solvent, with the present worth of its BTC holdings manner larger than the corporate’s market cap, which means it might promote the Bitcoin and comfortably repay all shareholders. However Schiff was having none of that, saying that the occasion Technique tried promoting its BTC, costs would plummet.