Peter Schiff on Wednesday said Strategy Inc. (NASDAQ:MSTR) has entered a death spiral, arguing the company ran out of investors willing to overpay for its stock.

Why The Model Broke The Moment mNAV Dropped Below One?

In an interview on July 1, Schiff stated that Strategy’s model worked only while its stock traded at a premium to the Bitcoin (CRYPTO: BTC) it held.

This allowed Michael Saylor to sell overpriced shares and buy more Bitcoin with the proceeds. 

With the stock now worth less than its underlying Bitcoin holdings, that trade no longer works.

“He’s run out of idiots willing to overpay for his stock,” Schiff said. Saylor has resorted to promising high yields on preferred stock to raise money, but those yields are becoming unsustainable. 

STRC currently yields 15% in the market despite a 12% dividend, meaning investors are pricing in the risk that Saylor can’t pay it from a company with no operating income beyond its Bitcoin pile.

The Death Spiral Mechanics, As Schiff Sees Them

Bitcoin falls, so Strategy needs to sell more Bitcoin to maintain its cash reserve. That selling pushes Bitcoin lower. 

Lower Bitcoin means STRC’s implied yield rises as its price falls. Higher implied yield means Strategy needs to sell even more Bitcoin to service that debt.

“The lower Bitcoin goes, the more Bitcoin he has to sell to raise the money he needs. And then that pushes the price down even lower,” Schiff said. 

He argued Strategy’s $17 billion in Bitcoin purchases since October 2025 couldn’t prevent a 53% price decline, and asked what happens now that the company flips to net seller.

Schiff Has A More Blunt Take On The Broader Bitcoin Thesis

Schiff called the entire Bitcoin-as-digital-gold narrative the primary reason gold underperformed its own fundamentals, arguing investors who might have bought gold instead chose Bitcoin as an inflation hedge. 

He said a Bitcoin collapse would ultimately benefit gold by clearing that misconception from the market.

Schiff also dismissed the national strategic reserve argument, saying China and Russia have no interest in Bitcoin and are “laughing their heads off” at the suggestion of a global arms race to accumulate it. 

He called Donald Trump’s pro-Bitcoin positioning a pump-and-dump that benefited early sellers, noting Bitcoin now trades below where it was when Trump won the election despite all the political tailwinds.

Schiff Sees Gold Basing At $4,000 With $6,000 As The Next Target

Schiff said the correction following the Iran war selloff looks like a buy-the-rumor sell-the-fact setup, with $4,000 establishing itself as a new base. 

He expects gold to make another run at $5,000 and reach $6,000 by next year, driven by real rates staying negative even if the Fed nudges nominal rates higher.

He also said Fed Chair Kevin Warsh is unlikely to follow through on hawkish rhetoric, arguing central banks always choose inflation over crashing asset prices, rising unemployment, and forced government spending cuts.

“They have no stick,” Schiff said. “So they have to speak loudly.”

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