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

MicroStrategy founder Michael Saylor’s “coin-selling vaccination theory” has sparked heated discussion. The company plans to sell a small amount of Bitcoin to gain greater capital space, drawing criticism from Peter Schiff as a Ponzi scheme lacking cash flow.

Saylor’s “coin-selling vaccination theory” continues to trend

Michael Saylor and Strategy once again become market focal points. Recently, the market has been buzzing about the so-called “coin-selling vaccination theory,” due to Strategy’s preferred stock STRC rebounding close to face value, and market speculation that the company may adjust its financing and Bitcoin management strategies. Some investors believe that in the future, the company might sell a small amount of Bitcoin to support larger-scale asset expansion and dividend payments.

• Related news: The end of the “never sell coins” myth: MicroStrategy founder personally responds to the “coin-selling vaccination theory” sparking heated discussion

Saylor’s recent series of statements have also led the market to re-interpret his stance. Especially remarks like “selling 1 Bitcoin to buy 10 Bitcoin” have triggered discussions on whether the “never sell coins” strategy might be subject to adjustment.

Long-time Bitcoin skeptic Peter Schiff immediately publicly criticized, describing Strategy’s model as a “typical centralized Ponzi scheme,” and questioning the company’s financial structure’s over-reliance on market sentiment and leverage cycles.

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

Peter Schiff questions dividend model lacking real cash flow

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

He points out that if the company ultimately needs to sell Bitcoin to pay dividends, it essentially involves asset liquidation and redistribution of funds, not profits from business operations.

Schiff also criticizes that Strategy has long relied on convertible bonds, preferred shares, and leveraged financing to continuously expand its Bitcoin holdings. While this has successfully increased market attention, it also heightens sensitivity to market volatility. In his view, this structure is very similar to high-leverage bubbles in traditional financial markets, just with Bitcoin as the underlying asset. He even describes that Strategy is gradually turning Bitcoin faith into a highly financialized capital game.

Market re-evaluates Strategy’s positioning

As Strategy continues to increase its Bitcoin holdings, market opinions on the company’s positioning are gradually diverging. Some investors still see it as a “Bitcoin leverage ETF substitute,” believing the company amplifies Bitcoin asset leverage through capital market tools. Even with the widespread adoption of spot ETFs, Strategy maintains high attention and premium performance.

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

Especially as the market begins to discuss “selling coins to pay dividends,” external views are re-examining its capital structure and long-term sustainability. Some analysts worry that if the company needs to regularly sell Bitcoin to maintain cash flow, it could undermine the brand narrative built over many years.

Additionally, the ongoing high-interest-rate environment in the U.S. makes leverage financing costs a potential pressure point. If Bitcoin prices remain volatile for a long period, market tolerance for Strategy might start to decline.

Bitcoin corporate experiment faces new test

Michael Saylor has long been one of the most prominent advocates for corporate Bitcoin holdings, almost transforming Strategy into a Bitcoin asset vehicle.

As the company’s scale rapidly expands, related financial product structures are becoming increasingly complex. The market is beginning to realize that relying solely on the narrative of long-term Bitcoin holding can no longer fully explain the company’s valuation logic.

• Supporters argue that Strategy remains one of the most successful Bitcoin corporate experiments globally;
• Critics believe that the company currently heavily depends on financing ability, stock price premiums, and market confidence. If market cycles reverse, risks could also amplify.

Behind this debate, it also reflects how the relationship between companies, investors, and markets is rapidly changing as the crypto market becomes more financialized.

This content is compiled by Crypto Agent from various sources, reviewed and edited by “Crypto City.” It is still in training, and may contain logical biases or informational errors. The content is for reference only and should not be considered investment advice.