Economist Peter Schiff has renewed his criticism of Strategy (MSTR), arguing that Bitcoin bulls may be better served by holding BTC directly rather than purchasing the company's shares. His comments followed Strategy's latest disclosure of a large common stock sale that raised approximately $544.5 million without any corresponding Bitcoin purchase.

Strategy, formerly known as MicroStrategy, is the largest publicly traded corporate holder of Bitcoin. Executive Chairman Michael Saylor has positioned the company as a Bitcoin treasury vehicle, making MSTR shares a popular proxy for investors seeking Bitcoin exposure through traditional brokerage accounts.

Schiff Questions MSTR Share Rally

Strategy sold 5,429,160 MSTR shares during its most recent reporting period. Despite raising substantial capital, the company did not acquire additional Bitcoin, leaving its total holdings unchanged at 843,775 BTC — a position representing roughly 4% of Bitcoin's total supply.

Schiff questioned why the stock gained roughly 7% following the announcement. He contended that issuing new shares without expanding Bitcoin holdings effectively reduces the amount of BTC tied to each outstanding common share.

Strategy's year-to-date Bitcoin yield declined to 4.5%, down sharply from 13.3% on May 25 — a significant drop within roughly two months. Schiff warned that the yield could turn negative if the current trajectory persists, and reiterated his position that investors bullish on Bitcoin would gain clearer exposure by holding the cryptocurrency itself. However, Schiff, a long-standing Bitcoin skeptic, noted that his recommendation is hypothetical, as he has stated he would hold neither asset.

Funds Redirected to Cash Reserve and Preferred Share Repurchases

According to the company's latest filing, Strategy allocated $525 million from the stock sale to its dollar reserve, bringing the total cash reserve to approximately $3.7 billion. The company also spent $25 million to repurchase STRC preferred shares, signaling funding needs beyond its Bitcoin treasury strategy.

Strategy's Bitcoin holdings have grown by only 37 BTC since May 25. The company has now gone four consecutive weeks without announcing a new Bitcoin acquisition. Earlier in the current cycle, Strategy sold 3,588 BTC for approximately $216 million to support preferred dividend payments.

Dilution Risk Acknowledged in Quarterly Filings

Bitcoin yield measures the percentage change in Bitcoin exposure per MSTR share. When Strategy issues stock without purchasing additional BTC, the per-share Bitcoin backing can decline. Strategy has acknowledged this dilution risk in its own quarterly filings, noting that continued stock issuance may weaken the direct correlation between common shares and the company's Bitcoin treasury.

MSTR shares have historically traded at a premium to the market value of the company's Bitcoin holdings, reflecting investor willingness to pay above net asset value for the stock's liquidity and leverage profile. Schiff's critique centers on whether that premium is sustainable if per-share Bitcoin exposure continues to erode through equity issuance without corresponding acquisitions.

Schiff argued that Strategy is increasingly directing value toward creditors and preferred shareholders at the expense of common shareholders, who face dilution when stock is sold without corresponding Bitcoin purchases.

Long-Term Historical Data Presents Contrasting View

Bitcoin researcher Adam Livingston offered a counterpoint based on historical performance data. Analyzing more than 1.1 million holding periods between August 2020 and July 2026, Livingston found that Strategy outperformed direct Bitcoin holdings in 68.75% of the periods examined. While the performance gap was modest over shorter timeframes, it widened considerably over longer holding periods.

The study indicated that a median four-year investment in Strategy produced approximately 108.6% more ending wealth than holding Bitcoin directly, with Livingston attributing the outperformance primarily to the benefits of extended holding periods.

Bitcoin traded near $64,500 as the debate continued. Both Bitcoin and MSTR shares remained sensitive to broader market movements ahead of the Federal Reserve's next policy decision. Market participants continue to monitor Strategy's weekly filings for signs of resumed Bitcoin purchasing activity and any further shifts in the company's yield metric.

Source: Blockonomi