Peter Schiff: Strategy’s 11.5% Yield Is a “Death Spiral” in the Making

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Gold advocate and longtime Bitcoin critic Peter Schiff has intensified his attacks on Michael Saylor and Strategy, warning that the company’s escalating issuance of high-yield preferred shares has put it on a path toward a potentially catastrophic financial collapse. Strategy is now the world’s largest corporate Bitcoin holder, with 815,061 BTC on its balance sheet. Strategy trades as MSTR on public markets; STRC is its perpetual preferred share series, a separate instrument from the common stock and the one at the center of this debate.

The Mechanics Behind Schiff’s Warning

At the center of Schiff’s argument is Strategy’s STRC preferred stock, which launched in July 2025 at a 9% annual dividend yield. Seven consecutive monthly increases have since lifted that rate to its current 11.5%, a trajectory Schiff says is itself the argument. 

Saylor has contended that Bitcoin only needs to appreciate by approximately 2% annually to cover that obligation. Schiff rejects that premise outright, arguing it is only valid if the company stops issuing new debt, something he says Saylor has shown no intention of doing.

His rebuttal is straightforward: the 2% math only holds if Strategy stops issuing new STRC. Since launch, STRC has financed roughly 50,792 BTC in purchases. Strategy bought 64,948 BTC in 2026 alone before its latest tranche, tracking well ahead of its historical buying pace. Each new issuance adds to the recurring cash burden. As the pool of obligations grows, so does the Bitcoin appreciation required to cover it.

“The more STRC MSTR sells, the more BTC must rise to cover the yield,”

Schiff wrote in a recent post, laying out the self-reinforcing nature of the risk he sees building inside the firm.

No Earnings, No Exit – Except Bitcoin

Schiff’s critique rests heavily on the fact that Strategy does not generate the kind of traditional corporate earnings that would allow it to service high-yield obligations through operating cash flow.

Without that revenue base, he argues the company will eventually be compelled to sell Bitcoin to meet its yield commitments, and that forced selling would itself suppress the Bitcoin price, worsening the company’s position. If STRC shares then fall below par, Strategy faces pressure to raise the yield further to attract buyers, deepening the spiral.

There is one structural nuance worth noting that cuts both ways: perpetual preferred dividends like STRC carry no firm legal floor. Strategy could pause payments without triggering a formal default in the way a bond default would. 

That reduces the hard bankruptcy risk Schiff implies, but it also means STRC holders have less protection than they might assume. A dividend pause would likely crater the STRC price and, by extension, MSTR and Bitcoin.

“The only way to stop the death spiral is for MSTR to cancel the dividend. Then STRC crashes, taking MSTR and BTC with it,” Schiff stated.

A Funding Model Under Strain

Schiff has also pointed to a shift in how Strategy is financing its Bitcoin acquisitions as an early sign that its previous approach is running out of road. On April 18, he noted that the company can no longer easily fund large Bitcoin purchases by selling common shares at a premium to net asset value.

This mechanism allowed the company to raise cash by selling new shares at a premium without incurring fixed interest or dividend costs. Strategy’s April 20 purchase of 34,164 BTC for $2.54 billion illustrates the shift: the filing showed it was funded primarily by issuing 21.8 million STRC preferred shares ($2.18 billion) alongside a smaller common equity raise.

Saylor announced a $42 billion ATM program in March, which in theory provides significant runway for continued accumulation. Schiff’s response is that the ATM program doesn’t resolve the preferred share problem, it just means the company has more capacity to issue the very instrument he argues is compounding the risk. More STRC sold means more yield obligations, which means Bitcoin needs to climb even faster.

“Now it’s forced to issue preferred shares with an 11.5% yield. Covering that commitment leaves the company with few options beyond selling more preferreds, discounted common, or Bitcoin,” Schiff warned.

Broader Market Debate: Is Strategy’s Model Sustainable?

The back-and-forth between Schiff and Saylor has drawn attention from investors and analysts questioning whether Strategy’s Bitcoin accumulation model carries unsustainable risk. TD Cowen analyst Lance Vitanza maintains a Buy rating on MSTR with a $385 price target, and Saylor has publicly challenged Schiff to debate the STRC structure on his own terms.

Schiff argues that each new round of high-yield issuance raises the bar for how much Bitcoin needs to rise to keep the company solvent. In his view, the bar is rising faster than Bitcoin is likely to climb. 

As of press time, Strategy has not publicly responded to Schiff’s latest warnings and has continued expanding its Bitcoin holdings. Whether STRC demand holds near current yields, and at what dividend level, will largely determine whose framing proves correct.