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Popular financial commentator Peter Schiff has called on the U.S. Securities and Exchange Commission to investigate statements made by Michael Saylor. The dispute centers on the suitability of STRC, perpetual preferred stock, for conservative investors.
At the core of the criticism are SEC marketing and anti-fraud rules, as Schiff claims that Saylor openly acknowledged purchases of STRC by retirees whose primary goal is capital preservation and income generation without risking the principal amount of their investments. For Schiff, STRC is a high-risk instrument and a classic centralized Ponzi scheme.
Emphasizing that Bitcoin generates no profits and depends entirely on the inflow of new buyers, the critic believes Saylor's public statements will become grounds for future investor lawsuits against Strategy.
How Strategy leverages high market liquidity to sustain STRC
As for Saylor's own position, he argues that the company's model is fundamentally different from a "financial pyramid" and resembles a developer business more closely. The company is prepared to selectively sell BTC in order to make STRC-related payments, but only under the condition that it remains a net buyer and does not end the year with a smaller balance than it started with.
If 1 BTC is sold, another 10-20 BTC are purchased on top of it.
According to Saylor, the market's high liquidity, its ability to absorb $100-200 million per hour without moving the price, and global macroeconomic factors - from the Federal Reserve's tight monetary policy to tensions in the Middle East - will ensure a long-term inflow of capital into the digital asset.
While the debate remains rhetorical for now, in practice Strategy's model is demonstrating accelerating momentum. After 18 days of volatility, the STRC instrument restored parity at the $100 mark.
That recovery immediately affected volumes, as the company absorbed around 322 BTC during this Monday alone. For comparison, Strategy accumulated just 535 BTC during the entire previous week.
The current dynamics suggest that the market continues to absorb supply despite the regulatory and conceptual disputes between critics and the company's management.
Dan Burgin
U.Today Editorial Team
