In a recent post on X, economist Peter Schiff revealed what he believes are the main weaknesses in Michael Saylor’s Bitcoin strategy, bluntly calling it the “Bitcoin Pyramid.” At the center of the discussion is an instrument called STRC (Stretch Preferred Stock), which Schiff says could lead to the first forced sale of Bitcoin in the history of Strategy (formerly MicroStrategy).
What are STRCs? These are preferred shares that operate on different principles than regular MSTR shares. First, unlike the volatile Bitcoin price, STRC stock aims to consistently trade at $100, which Strategy and its economists say makes the product attractive to conservative funds that are prohibited from buying cryptocurrencies directly.
The Bitcoin pyramid is backed by $MSTR, which continues to buy $STRC by paying a yield of 11.5%. As more STRC stock is sold, Strategy burns even more cash. Once that cash is depleted, @Saylor will have to choose between suspending dividends or selling Bitcoin to pay.
— Peter Schiff (@PeterSchiff) March 9, 2026
To keep the stock at $100 during a market downturn, Strategy has had to raise its yield, which reached an annualized yield of 11.5% in March of this year. Additionally, STRC holders will be at the front of the line to receive their payments. The company is obligated to pay monthly dividends in dollars before profits are distributed to holders of common stock.
Why does Schiff call this the “Bitcoin Pyramid”?
In his view, the essence lies in repetitive debt. The strategy issues STRCs to obtain dollars, but those dollars are used to buy Bitcoin and there is no cash flow since Bitcoin itself has no dividends. Therefore, in order to pay out 11.5% to STRC holders, Saylor will either need to bring in new investors (which Schiff sees as a classic sign of a pyramid structure) or use up cash reserves (i.e., sell Bitcoin).
Currently, Strategy’s cash reserves are estimated at $2.25 billion. With current interest rates of 11.5% and preferred stock issuance, the company spends hundreds of millions of dollars a year just to have this stabilizing measure in place.
So Schiff warns that once the cash runs out, Saylor will have to make a choice. Either declare a dividend default that wipes out the value of STRC and destroys confidence in MSTR, or start liquidating Bitcoin.
