Peter Schiff: MicroStrategy is a Ponzi scheme! Saylor selling coins to pay dividends is just self-justification

Michael Saylor, the founder of MicroStrategy, has sparked heated debate with his “coin-selling vaccination theory.” The company plans to sell a small amount of Bitcoin to obtain greater capital room, drawing criticism from Peter Schiff for allegedly resembling a Ponzi scheme that lacks cash flow.

Saylor’s “coin-selling vaccination theory” keeps spreading

Michael Saylor and Strategy are once again in the spotlight. Recently, market buzz around the so-called “coin-selling vaccination theory” has been driven by Strategy’s preferred stock STRC rebounding to nearly face value, along with speculation that the company may adjust its financing and Bitcoin operation strategies. Some investors believe the company may, in the future, support larger-scale asset expansion and dividend payments by selling a small amount of Bitcoin.

• Related news: The “never sell coins” myth comes to an end—MicroStrategy founder responds in person to the “coin-selling vaccination theory” sparking heated debate

A recent string of comments from Saylor has also prompted the market to re-interpret his stance. In particular, remarks such as “sell 1 Bitcoin to buy 10 Bitcoins” have fueled public discussion over whether the “never sell coins” strategy might be subject to change.

Long-time Bitcoin bear Peter Schiff has immediately issued public criticism, describing Strategy’s model as a “typical centralized Ponzi scheme,” and questioning whether the company’s financial structure is overly dependent on market sentiment and leverage cycles.

Image source: X/@PeterSchiff Peter Schiff publicly criticized, describing Strategy’s model as a “typical centralized Ponzi scheme”

Peter Schiff questions the dividend model for lacking real cash flow

Schiff believes the biggest problem with Strategy is that the company lacks a stable and sustainable core operating cash flow.

He points out that if the company ultimately needs to sell Bitcoin to pay dividends, it is essentially still redistributing funds after asset liquidation, rather than coming from profit generated by business operations.

Schiff also criticized that Strategy has long been expanding its Bitcoin holdings through convertible bonds, preferred shares, and leveraged financing. While this has succeeded in boosting market attention, it has also increased sensitivity to market volatility at the same time. In his view, this kind of structure is very similar to high-leverage bubbles in traditional financial markets—only the underlying asset has been replaced with Bitcoin. He even said that Strategy is gradually turning Bitcoin belief into a highly financialized capital game.

The market re-evaluates Strategy’s positioning

As Strategy continues to add to its Bitcoin holdings, the market’s view of the company’s positioning has gradually diverged. Some investors still see it as a “Bitcoin leverage ETF substitute,” believing the company amplifies leverage on Bitcoin assets through tools in the capital markets. Even though spot ETFs have become widely popular, Strategy continues to maintain high attention and a high premium.

Another camp argues that Strategy has gradually deviated from its original positioning as a software company and is more like a financial engineering firm built on Bitcoin.

Especially after the market began discussing whether “selling coins” could be used to pay dividends, outsiders have also re-examined its capital structure and long-term sustainability. Some analysts worry that if the company needs to regularly sell Bitcoin to maintain cash flow, it may undermine the brand narrative built over many years.

In addition, the ongoing high-interest-rate environment in the U.S. has also made leveraged financing costs a potential source of pressure. If Bitcoin prices remain stuck in a period of fluctuation for a long time, market tolerance for Strategy may start to decline.

Bitcoin “corporatization” experiment faces new challenges

For many years, Michael Saylor has been one of the most prominent proponents of corporate Bitcoin holdings, even nearly transforming Strategy into a vehicle for Bitcoin assets.

As the company’s scale expands rapidly, the structure of related financial products has also become increasingly complex. The market has started to realize that a narrative based solely on holding Bitcoin long term can no longer fully explain the company’s valuation logic.

• Supporters believe that Strategy remains one of the most successful corporate Bitcoin experiments in the world;
• Critics believe that the company currently relies heavily on financing capability, stock price premiums, and market confidence, and once the market cycle reverses, risks could also be amplified in parallel.

Behind this debate, it also reflects how, as the entire crypto market becomes increasingly financialized, the relationship among enterprises, investors, and the market is changing rapidly.

This article is generated by Crypto Agent by compiling information from multiple parties, and has been reviewed and edited by “Crypto City.” It is still under training, and may contain logical bias or informational errors. The content is for reference only and should not be taken as investment advice.