Peter Schiff, "Saylor's Cash is Draining"...Strategy's Debt Strategy Controversy

▲ Peter Schiff, Michael Saylor, Bitcoin (BTC)/AI generated image ©

Despite Peter Schiff's attack that "cash is running out," Strategy (MicroStrategy) actually increased its Bitcoin (BTC) holdings. In the market, the debate surrounding Michael Saylor's 'Bitcoin leverage strategy' is heating up again.

According to crypto media outlet Finbold on May 26 (local time), Peter Schiff, chief economist at Euro Pacific Capital, expressed concern over Strategy's recent repurchase of $1.5 billion worth of convertible bonds due in 2029 using $1.38 billion in cash. Schiff criticized, noting that Strategy's cash holdings have decreased to approximately $871 million, stating, "Cash is running out. What will they sell next to keep the system afloat?"

Schiff has previously argued that Saylor's Bitcoin accumulation strategy is "close to a Ponzi scheme." Especially after Strategy mentioned that it might sell Bitcoin if necessary to pay preferred stock dividends, Schiff warned that the company could face dividend suspension or a sharp drop in preferred stock in the future.

However, Strategy countered that this transaction actually improved its financial structure. The company repurchased $1.5 billion in debt for $1.38 billion, saving approximately $120 million, and reduced its total convertible bond volume from $8.2 billion to $6.7 billion. Subsequently, Strategy raised $2 billion through a new issuance of STRC preferred stock and used those funds to purchase an additional 24,869 BTC.

Strategy announced that it has recorded $6.8 billion in profit in BTC dollar terms and a 13.3% BTC return this year. Michael Saylor, co-founder, explained, "It's a multi-layered capital strategy that simultaneously utilizes cash, equity, and credit instruments," adding, "We are focused on increasing the value of Bitcoin per share while maintaining a robust financial structure in the long term."

Currently, Strategy's Bitcoin holdings total 843,738 BTC, with an estimated value of approximately $65 billion. While the market assesses that Saylor's aggressive Bitcoin accumulation strategy is still working, concerns are also simultaneously emerging that financial risks could resurface if Bitcoin price volatility increases.

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