Schiff Warns Strategy Investors
Peter Schiff says new share issues are weakening Strategy shareholders’ exposure to bitcoin.
Strategy is becoming less attractive as a way to make a leveraged investment in bitcoin, according to economist and well-known cryptocurrency critic Peter Schiff. He argues that repeated share offerings are reducing common shareholders’ exposure to the company’s bitcoin holdings, while benefiting creditors and preferred shareholders.
In a post published on X on July 16, Schiff said that Strategy was “no longer a leveraged bet on bitcoin.” In his view, further share sales will continue to dilute the amount of bitcoin attributable to each share.
Company data shows that Strategy holds 843,775 BTC, worth approximately $54.13 billion. Each share currently represents 207,776 satoshis. At the same time, the company has $6.75 billion in debt and $15.46 billion in preferred securities.
The key question is whether the amount of bitcoin per share will continue to grow. An increase in the company’s overall BTC reserves does not necessarily give shareholders greater exposure if the number of outstanding shares rises even faster.
The latest figures do not provide a clear answer. In the second quarter, Strategy’s BTC yield stood at minus 1.6%, indicating a decline in bitcoin exposure per share. Since the beginning of the year, however, the metric has remained positive at 6.6%.
Schiff has also raised concerns about the company’s financing structure. Strategy’s preferred securities are valued at $15.46 billion. They include STRC, a perpetual preferred stock series that currently offers a variable annual dividend of 12%.
The company can cover interest payments and dividends using its cash reserves, then replenish those reserves by raising capital or selling bitcoin. According to Schiff, this approach increases the risk of further dilution for common shareholders.
Strategy’s second-quarter financial results, scheduled for release on July 30, may provide more clarity. Investors will be watching the number of outstanding shares, the amount of bitcoin per share and the company’s next financing moves.
