Schiff warns STRC dividend could force Bitcoin sales

Peter Schiff wrote on X that Strategy’s 11.5% STRC preferred dividend may force the company to sell Bitcoin or keep issuing new STRC to cover monthly payouts, calling the structure “structurally unstable.” He argued the gap between the company's rising cash obligations and its Bitcoin holdings defines the risk.

Strategy holds 815,061 BTC after a $2.54 billion purchase on April 20 that the company financed mostly through equity issuance. STRC is a variable-rate preferred share that began trading in July 2025 with a 9% dividend and has seen seven consecutive monthly increases to an annualized 11.5%. STRC issuance has financed roughly 50,792 BTC since launch, and Strategy bought 64,948 BTC in 2026 before its most recent tranche.

Schiff pointed to Bitcoin's lack of native cash flow and the monthly STRC payouts as a structural challenge. He wrote that claims Bitcoin needs to rise only about 2% per year to cover the STRC yield assume Strategy stops issuing STRC. He noted the company has increased issuance, and each new sale of STRC raises recurring cash obligations and the price gains Bitcoin would need to offset them.

Analysts have raised related questions about how STRC might perform if credit markets tighten or interest rates rise. Schiff and others say weaker demand for STRC could force MicroStrategy to sell Bitcoin to meet cash needs, a move that would put downward pressure on BTC prices and on Strategy’s net asset value. Preferred dividends do not carry a firm legal floor, allowing a company to pause payments without triggering a formal default.

Strategy's leadership has rejected the framing that STRC issuance creates a spiral. Michael Saylor has cited the company’s long-term performance, referenced a $42 billion at-the-market program the company announced in March, and publicly challenged Schiff to debate the STRC structure on his terms.

Key variables cited by market participants include whether investors continue to buy STRC at current yields and the size of future capital raises by Strategy. Market reception to new STRC offerings and broader credit-market conditions will affect the company’s funding options and any need to sell Bitcoin.