Peter Schiff Criticizes Strategy's Bitcoin Buy for Negative Shareholder Yield

Prominent gold advocate and Bitcoin critic Peter Schiff has renewed his criticism of Strategy and its aggressive Bitcoin accumulation strategy.

According to Schiff, Strategy has abandoned the model that previously increased Bitcoin’s value for common shareholders. In an X post, Schiff argued that the company initially generated positive Bitcoin yield through shareholder-friendly capital raises.

Specifically, Strategy sold common stock at a premium to its underlying value and issued preferred shares with relatively low dividend obligations. The company then used the proceeds to acquire more Bitcoin, allowing its Bitcoin holdings to grow faster than the dilution created by new share issuance. As a result, shareholders benefited from increasing Bitcoin exposure on a per-share basis.

However, Schiff believes that Strategy’s approach has since changed. He claims the company is now forcing shareholders to accept a negative Bitcoin yield. In his view, Strategy is now issuing additional shares in a manner that generates negative Bitcoin yield for investors, meaning the amount of Bitcoin backing each common share declines over time.

This dilution, according to him, is now outpacing the growth of Bitcoin holdings on a per-share basis. Furthermore, Schiff argues that the company has prioritized continued Bitcoin purchases and support for Bitcoin demand over maximizing value for existing shareholders.

Schiff’s criticism came shortly after Strategy resumed its Bitcoin accumulation campaign. Last week, the company sparked concern across the crypto market after selling 32 BTC, marking its first Bitcoin sale since 2022.

However, Strategy quickly reversed course. In an update released today, the company announced an acquisition of 1,550 BTC for approximately $101 million. The purchase increased Strategy’s total Bitcoin holdings to 845,256 BTC, currently valued at roughly $53.92 billion. In addition, the company disclosed that it had increased its USD reserves by $100 million, bringing the total to $1 billion.

Following the announcement, Schiff accused Strategy Executive Chairman Michael Saylor of deliberately omitting details that, in his view, would show the purchase diluted existing common shareholders.

Notably, neither Strategy nor Saylor disclosed the company’s Bitcoin yield metric in the latest acquisition update, unlike previous announcements. As a result, Schiff declared that Strategy’s Bitcoin acquisition game is effectively over.

Meanwhile, Bitcoin responded positively to the news of Strategy’s BTC acquisition. Following the announcement, the asset climbed above $63,000 and eventually reached $63,770 within an hour. At press time, Bitcoin was up 3.01% over the past 24 hours, although it remains down 10.78% over the previous seven days.