Financial commentator and long-time crypto skeptic Peter Schiff has warned that the new "BTC Monetization Program," which was recently announced by Strategy, could actually trigger a market death spiral.
According to Schiff, the program will make the price of BTC plunge lower, which will force the Virginia-based firm to sell even more.
From a supreme buyer to an active seller
According to Strategy’s official press release, the firm, which remains the leading corporate holder of BTC by an enormous margin, liquidated portions of its massive cryptocurrency holdings.
The aforementioned monetization program makes it possible for the company to sell Bitcoin for USD reserve funding (up to $1.25 billion for padding its fiat cash reserves), yield maintenance, as well as equity buybacks (up to $1.0 billion in Digital Credit Securities repurchases and another $1.0 billion in Class A common stock buybacks).
Schiff immediately took to X (formerly Twitter) to sound the alarm over the new plan. "MSTR is now a Bitcoin seller," Schiff stated bluntly. "Under its just-announced 'Bitcoin Monetization Program, ' it may sell Bitcoin for three purposes: to raise up to $1.25B to fund its USD reserve, to pay preferred dividends & debt interest, and to fund $1B of preferred and $1B of common stock buybacks."
Bitcoin is currently hovering around the critical technical level of $60,000, and the recently approved $3.25 billion capital runway is bad news for the bulls, according to Schiff.
"If Saylor crushed Bitcoin when he announced the sale of just 32 Bitcoin, imagine the impact of today's announcement authorizing $MSTR to sell $3.25B worth of Bitcoin," Schiff calculated. "At $60K, that's over 54,000 Bitcoin."
The pivot comes at a time of extreme distress for STRC, which is Strategy's unique financial instrument that recently collapsed well below $100.
Strategy announced it would hike the STRC regular dividend rate to a staggering 12.00% per annum, effective July 1.
At the same time, Strategy CFO Andrew Kang reassured the market that the firm is not a forced seller. Strategy currently holds a USD reserve of approximately $2.55 billion.
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 remains in the green.
U.Today Editorial Team
Dan Burgin
