Peter Schiff Says Strategy’s STRC is a Ponzi Scheme: Here’s Why

Strategy’s software business generates revenue, but Schiff says it falls short of covering 11.5% annual dividends across STRC’s issuance.

Bitcoin critic Peter Schiff held a live audio Space on X earlier today, where he called Strategy’s preferred stock offering, STRC, “an obvious Ponzi scheme” and invited Michael Saylor and others to prove him wrong.

The space ran for roughly two hours, with Schiff using most of that time to walk through why he thinks the product will eventually leave retail investors with nothing.

Why Schiff Says the Math Doesn’t Work

Schiff opened the Space with a textbook definition:

“A Ponzi, by definition, is when income paid out to existing investors comes from bringing in new investors, and then you take the money from the the new investors and use it to make payments to the old investors,” he said.

He also claimed that Strategy has no meaningful income. Yes, its software business generates some revenue, but it is nowhere near enough to cover the dividend obligations on STRC, which pays holders 11.5% annually in monthly cash distributions.

As such, STRC fits that template directly because Strategy raises money by issuing new shares of the preferred stock, uses those proceeds to pay dividends to existing STRC holders, and then must issue still more shares to pay the next round of holders.

“How does STRC make payments when the company itself doesn’t have any income?” Schiff asked. “The 11.5% yield on STRC is paid by selling more shares of STRC, and then you get money from the new investors to pay the old investors.”

Strategy has been buying Bitcoin aggressively. Last week, it spent $2.54 billion acquiring 34,164 BTC at an average price of $74,395, to bring its total holdings to 815,061 BTC, bought for approximately $61.56 billion at an average price of $75,527.

STRC has been the funding engine for such purchases, with the preferred stock hitting a new single-day trading volume record on April 13, when it brought in $1.1 billion, an amount 46.5% above its previous record and more than four times its 300-day average of around $274 million.

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Shares Could Go to Zero

Schiff pointed out that Strategy has no legal obligation to keep paying dividends on STRC since that is discretionary. Holders cannot force repayment and cannot redeem their shares; they can only sell them. So, if Saylor stops paying, the yields disappear, demand collapses, and the shares go to zero.

“It is an IOU for nothing,” claimed the gold bug.

The yield itself, he argued, tells the story. It started at 9% when STRC launched in July 2025 and has been raised several times since, sitting at 11.5% since April. According to Schiff, the demand for STRC keeps softening, so the rates keep climbing to pull in new buyers.

“They keep jacking it up as the supply of suckers dries up.”

One listener on the Space pushed back, saying Strategy was solvent, with the current value of its BTC holdings way higher than the company’s market cap, meaning it could sell the Bitcoin and comfortably pay off all shareholders. But Schiff was having none of that, saying that the instance Strategy tried selling its BTC, prices would plummet.