MicroStrategy’s Bitcoin-Leveraged Strategy Faces Renewed Scrutiny Amid Market Concerns

MicroStrategy’s long-running, bitcoin-leveraged strategy drew renewed criticism over the weekend as skeptics questioned whether Michael Saylor’s company can withstand sustained market pressure. Among the most vocal was prominent Bitcoin critic Peter Schiff, chairman of Schiff Gold and chief global strategist at Euro Pacific Asset Management, who took to X to argue that the company’s approach depends heavily on ongoing demand for its high-yield preferred shares. He claimed the published yields “will never actually be paid,” warning that weakened demand could trigger what he described as a potential “death spiral.” Schiff even challenged Saylor to debate him at Binance Blockchain Week in Dubai this December, framing the invitation as a direct confrontation over MicroStrategy’s bitcoin-centric corporate strategy.

Countering the criticism, Jeff Dorman, chief investment officer at Arca, dismissed what he called widespread “stupid, inaccurate takes” circulating online about MicroStrategy’s financial health. Without naming Schiff, Dorman said that fears the company might be forced to sell its bitcoin holdings ignore the realities of its balance sheet. He highlighted Saylor’s 42% ownership stake, which makes an activist takeover “almost impossible,” and emphasized that none of the company’s debts include covenants that would require liquidation of bitcoin reserves. Dorman also noted that MicroStrategy’s legacy software division continues to generate positive cash flow, helping support what he described as manageable interest obligations. According to him, lenders often extend maturities rather than force defaults, a common “extend and pretend” practice.

Despite accumulating more bitcoin, MicroStrategy’s stock continues to lag. Class A shares closed at $199.74 on Friday, down over 33% year-to-date, while bitcoin itself has remained nearly flat. StrategyTracker data shows the company’s diluted market net asset value multiple near 1.06x, indicating the stock trades only slightly above its bitcoin-backed value once future shares from options, warrants, and convertible debt are factored in.

Bitcoin was trading around $94,293 late Sunday, down about 1.2% over the previous 24 hours.