Key highlights:

  • Peter Schiff raises concerns about Strategy’s Bitcoin strategy
  • Despite BTC’s surge, STRC shares are still trading under their $100 target
  • Strategy sold 18.26 million MSTR shares and raised $2 billion

Bitcoin critic Peter Schiff has put forward a fresh warning about Strategy (MSTR). In a recent X post, Schiff argued that Strategy could face growing pressure to raise STRC’s dividend if it wants to continue issuing the preferred stock to fund future Bitcoin purchases.

This comment comes as Strategy announced a new $1.59 billion USD cash pool on Monday. The move gives the company more flexibility during market swings. As noted by the company, the money could be used for BTC purchases, dividends, debt payments, and share buybacks. However, the company had not made any new Bitcoin purchases.

Peter Schiff raises concerns over Strategy’s STRC funding plans

Peter Schiff took to X earlier today to raise concerns over Strategy’s STRC plans. According to him, the Bitcoin treasury company may face difficulties raising fresh funds for future BTC purchases. 

Schiff argued that Strategy’s stock has not gained much momentum despite the Bitcoin price’s significant growth. He also pointed out that STRC was still trading only slightly above $95. This, according to Schiff, indicates that the company may need to raise the dividend again to attract investors and issue more preferred shares. However, it's worth highlighting that the STRC stock price has since climbed to just above $97 (still short of the $100 target). 

The Bitcoin critic also warned that Strategy could face challenges in raising fresh funds for future BTC purchases. If the company continues using its funds to buy back preferred shares instead, Schiff believes that the amount of Bitcoin backing each common MSTR share could decline.

Strategy raises $2B, builds $6.69B liquidity reserve

It is worth noting that Peter Schiff’s comments come on the heels of Strategy’s latest $2 billion stock sale. The company sold 18.26 million MSTR shares and raised $2 billion. The company allocated $300 million into its USD Reserve and used another $136.4 million to repurchase 1.43 million STRC preferred shares. The rest of the funds went into a new $1.59 billion USD Cash pool.

As per the latest data, Michael Saylor’s company has $5.1 billion in its USD Reserve and $1.59 billion in USD Cash. This gives the company a staggering $6.69 billion in total dollar liquidity. With this new cash pool, Strategy can make Bitcoin purchases, share buybacks, debt payments, and other corporate needs.

STRC struggles to rise even as Bitcoin price gains

Currently, the Bitcoin price is witnessing a strong comeback amid multiple positive catalysts, including ETF inflows and regulatory developments. As of press time, the BTC price is recorded at $80,266, marking a six-month high.  The current price comes with a notable 5% daily uptick. The coin has also seen remarkable surges of 25% and 23% over the past week and month, respectively.

 

However, as Peter Schiff noted, this positive sentiment has failed to influence the Strategy preferred stock price. Despite the STRC repurchase program and the Bitcoin price surge, the stock price closed at $97.21, marking a marginal 0.8% surge. This limited move has raised questions about whether the company can still use STRC to raise money for additional BTC purchases.