Goldbug Peter Schiff Calls MSTR a ‘Fraud’—Analysts Say It Could Still Outperform Bitcoin

MicroStrategy (MSTR) is astatine the halfway of a heated debate, arsenic Peter Schiff labels the company’s concern exemplary a fraud. Schiff warns that MSTR’s reliance connected high-yield preferred shares and income-oriented funds is unsustainable, predicting that the institution could yet spell bankrupt.

Yet analysts and traders reason that MSTR’s strategy whitethorn inactive connection unsocial leveraged Bitcoin exposure, fueling a divided successful marketplace sentiment.

According to Schiff, MicroStrategy’s preferred-share financing exemplary could trigger a “death spiral,” with the goldbug terming the firm's full concern exemplary a fraud.

Schiff’s sentiment stems from concerns implicit MicroStrategy’s concern model, which relies connected income-oriented funds buying its “high-yield” preferred shares. According to Schiff, those published yields whitethorn ne'er really beryllium paid.

“Once money managers recognize this, they’ll dump the preferreds & MSTR won’t beryllium capable to contented immoderate more, mounting disconnected a decease spiral,” helium noted.

MicroStrategy stopped issuing caller convertible bonds successful February 2025, shifting instead to preferred stock offerings (the STR series), which commenced in September 2025.

These preferred shares transportation importantly higher involvement rates, suggesting investors present request stronger incentives amid tightening marketplace conditions.

Schiff’s broader statement emphasizes the structural risks inherent successful the company’s approach. His bony of contention is that adjacent if Bitcoin rises, MSTR’s debt-fueled exemplary could fail, putting the steadfast astatine hazard of insolvency.

Crypto trader KillaXBT highlighted a imaginable Black Swan scenario. According to the analyst, a 50–60% driblet successful BTC could pb to tighter indebtedness rules, collateral calls, and forced Bitcoin sales, particularly if liquidity dries up.

He likened MicroStrategy to a stack of cards built connected Bitcoin, noting that leverage amplifies some gains and losses, and a large marketplace correction could strain the company’s financing.