Peter Schiff, a financial commentator and long-time cryptocurrency skeptic, says the new “$BTC Strategy’s recently announced “monetization program” could actually cause a market death spiral.
According to Schiff, the program is priced as follows: $BTC A decline would force the Virginia-based company to sell more.
From supreme buyer to active seller
According to Strategy’s official press release, the company remains a major corporate holder. $BTC It liquidated part of its vast cryptocurrency holdings by a huge margin.
The aforementioned monetization program will allow the company to sell Bitcoin for US dollar reserve funding (up to $1.25 billion in fiat reserve padding), yield preservation, and stock repurchases (up to $1 billion in digital credit securities repurchases and an additional $1 billion in Class A common stock repurchases).
Schiff immediately contacted X (formerly Twitter) to alert him to the new plan. “MSTR is now a Bitcoin seller,” Schiff said bluntly. “Under the just-announced Bitcoin Monetization Program, the company may sell Bitcoin for three purposes: raise up to $1.25 billion to fund the U.S. dollar reserve, pay preferred dividends and debt interest, and fund the repurchase of $1 billion of preferred stock and $1 billion of common stock.”
Schiff said Bitcoin is currently hovering around the technically important level of $60,000, and the recently approved $3.25 billion capital runway is bad news for bulls.
“If Mr. Saylor crushed Bitcoin when he announced the sale of just 32 Bitcoins, imagine the impact of today’s announcement authorizing $MSTR to sell $3.25 billion worth of Bitcoins,” Schiff calculated. “$60,000 is more than 54,000 Bitcoins.”
The switch comes at a time when Strategy’s proprietary financial product, STRC, is in extreme trouble, having recently fallen well below $100.
Strategy has announced that starting July 1st, STRC’s regular dividend rate will be raised to an astonishing level of 12.00% per year.
At the same time, strategic chief financial officer Andrew Kang reassured the market that the company is not a forced seller. Strategy currently holds approximately $2.55 billion in US dollar reserves.
The ultimate test will be whether the crypto market can absorb the psychological weight of a potential 54,000 Bitcoin liquidation threat. so far, $BTC It remains in the green.
