Michael Saylor went on the offensive this week, defending Strategy's Bitcoin-backed credit model after critics — including longtime Bitcoin skeptic Peter Schiff — labeled the company's STRC dividend structure a Ponzi scheme. Saylor said the business is built around monetizing Bitcoin capital gains rather than relying on perpetual equity issuance, and that the model works as long as Bitcoin appreciates enough to cover the dividend cost.
The Ponzi accusation
Schiff and others pointed to Strategy's willingness to sell Bitcoin, if needed, to fund dividends on its STRC preferred instrument as evidence the model is fragile. Saylor pushed back, arguing the business doesn't intend to be a 'net seller' of Bitcoin — a contrast with his famous 'never sell your Bitcoin' mantra. He said Strategy's credit issuance allows it to buy substantially more Bitcoin than it sells, making the firm a net accumulator even when it dips into its stash for dividends.
Inside the STRC structure
Strategy sold $3.2 billion of STRC in April, creating a monthly dividend requirement of roughly $80 million to $90 million. Saylor described the instrument as a form of 'digital credit' designed to reduce Bitcoin volatility while producing a defined yield. He noted the structure is overcollateralized: for every $1 of credit sold, Strategy holds $5 worth of Bitcoin. The core model is straightforward — issue credit, use the proceeds to buy Bitcoin, and expect long-term appreciation to exceed the dividend cost.
The 2.3% threshold
Saylor claimed that if Bitcoin appreciates just 2.3% per year, Strategy can pay dividends forever without selling common equity. That's a low bar by crypto standards, but it assumes consistent upward price movement. The company's recent earnings call indicated it was prepared to sell Bitcoin if needed to meet dividend obligations, a detail critics seized on. Saylor insisted that even in that scenario, the net effect is still accumulation because the credit raises more capital than the Bitcoin sold.
Real estate analogy
Saylor compared the structure to a real estate development company that raises capital through credit, acquires land, improves it, and monetizes the appreciation. He argued that Strategy's balance sheet should treat Bitcoin holdings as assets — not zero value — for credit rating purposes. The analogy isn't perfect, but it captures the idea: borrow cheap, buy something expected to rise, and keep the spread.
The debate isn't going away. With $3.2 billion in STRC sold and monthly dividend payments stacking up, the real test will be whether Bitcoin's price keeps pace. For now, Saylor is betting it will.
