Peter Schiff doubles down on calling Strategy’s STRC a “Ponzi” as MSTR swings on Bitcoin and earnings

Strategy (NASDAQ: MSTR), the software company turned Bitcoin treasury giant formerly known as MicroStrategy, has become a lightning rod for two parallel arguments: whether its STRC perpetual preferred program is sustainable finance or a circular scheme, and whether U.S. regulators should scrutinize how the structure is marketed. Peter Schiff, the economist and gold advocate, has repeatedly used the word “Ponzi” in public posts—a rhetorical attack, not a court finding—while Strategy executives insist the pipeline from issuance to Bitcoin is disclosed and intentional.

Price action is messy, not a one‑line “dip”

Headlines that equate Schiff’s commentary with a steady slide in MSTR can mislead. Trade reporting in early May, for example, noted MSTR closing about 7.08% higher at $177.17 in one regular session even as the STRC debate intensified (reported). Separately, after Strategy discussed first‑quarter results tied to Bitcoin’s quarterly drawdown, coverage described MSTR falling more than 4% in extended trading alongside enormous paper losses on the coin stack (reported). The honest summary is elevated two‑way volatility around earnings, issuance, and Bitcoin—not a single clean “Ponzi headline, stock down” causal line.

What STRC is, in plain terms

STRC is Strategy’s Perpetual Stretch Preferred equity, designed to raise capital that the firm then deploys toward Bitcoin. Holders receive cash dividends—coverage has cited an annualized payout near 11.5% paid on a monthly rhythm (reported). Benzinga’s reporting, summarizing company disclosures, said Strategy pays roughly $85 million per month in cash dividends to STRC holders by issuing common stock and using those proceeds to fund the payouts—mechanics that critics read as new equity in, old coupon out, while supporters read it as transparent capital markets funding of a treasury strategy.

Schiff’s “obvious Ponzi” framing—and Strategy’s counter

In a follow‑up to commentary tied to a late‑April interview defense, Schiff pushed back on the idea that transparency disproves his critique. Benzinga quoted him directly: “But I never accused Strategy of hiding the scheme. In contrast, I called STRC the most obvious Ponzi precisely because MSTR is so open about it,” Schiff said (reported). Earlier third‑party summaries of his social posts quoted language calling STRC the “most obvious Ponzi scheme to date” and faulting the SEC for not, in his view, effectively restraining promotion of the product (reported). Those lines are Schiff’s opinions; they are not allegations that have been adjudicated as fraud.

Strategy chief executive Phong Le, in an interview excerpt highlighted by Benzinga, defended the program’s clarity: “We are taking the proceeds of Stretch and putting it into Bitcoin, right? It’s not like we’re taking the proceeds, and we’re then using those proceeds to pay out dividends,” Le said. “So, it’s very clear what we’re doing with the proceeds.” The company did not, at the time of that article, return Benzinga’s request for further comment (reported).

Why the fight landed during a bruising earnings window

Strategy’s May 2026 quarterly narrative was dominated by mark‑to‑market pain on Bitcoin. MoneyCheck, summarizing the earnings materials, said the firm unveiled a $12.54 billion quarterly deficit for Q1 2026 after a 24% Bitcoin retreat, with about $14.46 billion in unrealized losses on digital assets in the three‑month window (reported). Revenue was still reported up year over year—about $124.3 million, an 11.9% increase—showing how the operating business and the treasury can diverge sharply in one statement (reported).

The same coverage noted Strategy held 818,334 BTC in early May—on the order of 3.9% of circulating supply—with commentary that the stock could trade at a discount to the marked value of Bitcoin on the balance sheet depending on the session (reported). Leadership also discussed selective Bitcoin sales to help cover dividend obligations—an admission that treasury coins are not purely “never touch” if cash engineering requires it (reported). That backdrop intensifies the policy argument: critics ask whether preferred coupons plus common issuance can outrun a prolonged bear phase; defenders point to disclosed metrics, scheduled distributions, and continued capital formation.

SEC angle: scrutiny versus investigation

Schiff’s posts and repackaged news summaries have criticized SEC oversight and implied regulators should intervene more aggressively on how STRC is presented to retail and institutional buyers (reported). This coverage does not establish that the SEC has opened a formal enforcement investigation or charged anyone in connection with STRC. Regulatory inquiries, when they exist, often remain non‑public for long stretches; absent a commission filing or official release, newsrooms should treat “calls for investigation” as political and rhetorical pressure, not as confirmation of a probe.

Neutrally, securities regulators routinely examine disclosure adequacy, risk labeling, and non‑misleading marketing for complex capital‑stack products—especially when high yields coincide with volatile collateral. Whether STRC’s documents and roadshow language clear that bar is a legal and fact‑specific question outside the scope of a news summary.

Takeaway for readers

The live debate is capital structure sustainability under stress, not a binary ticker reaction. MSTR can rally on a given Friday, sell off after a loss‑heavy print, and still sit at the center of a loud argument about Bitcoin, preferred dividends, and common issuance—with Schiff using maximalist vocabulary and Strategy insisting the cash flows are visible by design. Anyone sizing the stock should separate social‑media prosecutions from filings, covenants, and liquidity paths—and treat “Ponzi” in headlines as accusatory language until a court or regulator says otherwise.