The long-running debate between Peter Schiff and Michael Saylor has exploded again after Strategy Inc announced a major shift in its financial strategy. The company has created a $1.44 billion US Dollar Reserve, a move Schiff claims proves the company’s Bitcoin-based business model is “broken.”
Strategy Inc said it has set up a $1.44 billion USD Reserve to ensure it can continue paying dividends on its preferred stock and interest on its outstanding debt.
The reserve was built using proceeds from selling new shares through its at-the-market stock offering program.
The company says the USD Reserve will help stabilize operations during periods of volatility. Its plan is to eventually scale the reserve to cover 12 months of obligations, and later expand it to 24 months or more.
Michael Saylor called the new reserve “the next step in the company’s evolution”, explaining that the mix of a BTC Reserve and USD Reserve strengthens Strategy’s long-term vision as the “leading issuer of Digital Credit.”
Gold advocate and long-time crypto critic Peter Schiff reacted immediately — and harshly. According to Schiff, the announcement proves Strategy Inc’s model has hit a breaking point.
He posted: “Today is the beginning of the end of $MSTR. Saylor was forced to sell stock not to buy Bitcoin, but to buy U.S. dollars just to fund interest and dividend obligations. The stock is broken. The business model is a fraud, and Saylor is the biggest con man on Wall Street.”
Schiff argues that issuing stock to raise cash, not for buying Bitcoin, but to pay obligations, shows that Strategy Inc is struggling to sustain its aggressive Bitcoin-leveraged strategy.
The market is now watching closely. For years, Strategy Inc has been the most aggressive corporate buyer of Bitcoin. But with this new US dollar buffer, the company is showing that stability, cash flow, and liquidity are now just as important as Bitcoin accumulation.
Whether this marks a smart risk-management shift, or, as Schiff claims, the “start of the end” — will depend on how Bitcoin performs in the coming quarters.
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