Prominent economist and market analyst Peter Schiff has weighed in on Strategy Inc.’s investment in BTC and noted the firm’s declining share price and reduced Net Asset Value (NAV) premium. He further mentioned that, relative to doing leveraged Bitcoin buying, the stock has underperformed.
Schiff said on X that although Michael Saylor claimed a 6.9% Bitcoin return this year, MSTR shares have declined by 6%. He pointed to a dilution of the shareholders, which he stated reduced the premium on the company’s Bitcoin reserves by 85%.
Today, @saylor bragged about his leveraged Bitcoin buys generating a BTC yield of 6.9% so far in 2025. However, the share price of $MSTR is down 6% in 2025, while massive dilution has destroyed shareholder value, causing the premium to its Bitcoin holdings to collapse by 85%.
— Peter Schiff (@PeterSchiff) February 24, 2025
The NAV premium shows how the market values Strategy Inc. compared to its position in Bitcoin. According to the MSTR Tracker, the premium was still at 60%, down from 148% on January 19. Normally, a high premium has a positive correlation with investor confidence in the firm’s specific Bitcoin approach.
Convertible debt concerns
In another tweet, he also criticized the fact that the company was sourcing its Bitcoin acquisitions through convertible debt. He explained that while MSTR lost 4.5%, Bitcoin only grew by 2.5%, showing signs that the market is skeptical of the new $2 billion convertible note offering.
He cautioned that if MSTR keeps trading below the actual value of the Bitcoins, it is possible to end up with a Bitcoin negative return. Schiff has been very vocal in his criticism of the firm’s strategy saying that too much debt is dangerous if the price of Bitcoin drops.
Convertible notes allows the holders of the debt to swap their stake for the company stock in the future. Although there is potential upside in this structure, there are accompanying risks in case the stock price stays low or decreases. Schiff earlier noted that the repayment of its debts may turn into a problem if the price of Bitcoin declines.
Strategy major Bitcoin acquisition
Despite criticism, Strategy Inc. continues to acquire more Bitcoin holdings. The firm recently revealed that it has purchased 20,356 Bitcoins for about $1.99 billion. This acquisition takes its Bitcoin holdings to 478,740 BTC, worth more than $44 billion.
This acquisition was paid for through a market-based equity program and a fully subscribed $2 billion convertible notes issuance. Therefore, Strategy Inc. now owns more than 2% of outstanding Bitcoin.
As Cryptopolitan reported, the note is currently a 0% coupon and due on March 1, 2030, unless it is redeemed, repurchased, or converted earlier. Every $1,000 note may be converted into 2,072 shares of Strategy’s Class A common stock at $433.43 per share, a 35% premium to the current price.
According to the firm, “Strategy intends to use the net proceeds from this offering for general corporate purposes, including the acquisition of Bitcoin and for working capital.”
At the time of writing, Bitcoin was trading at $92,008.74, down 3.42% in the last 24 hours. MicroStrategy made itself one of the biggest institutional players in the market by investing in Bitcoin. However, Schiff and other critics remain skeptical about whether the firm can sustain the debt-fueled strategy in the long run.
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