Strategy holds billions of dollars in Bitcoin and increasingly attracts retail investor capital through securities issuance.
ForkLog delves into the business model of Michael Saylor's company, why critics label it a financial pyramid, while supporters view it as an example of effective risk management, and what lies behind the recent sale of part of its cryptocurrency reserves.
What’s Happening with Strategy Now
As of June 9, 2026, Strategy is the largest corporate holder of Bitcoin, with over 845,000 BTC on its balance sheet. The company's model is straightforward: raise capital in the market and purchase the leading cryptocurrency. The complexity arises from the instruments it uses and who is on the other side of the transactions.
Source: Strategy.In its latest transaction, the company acquired 24,869 BTC for approximately $2 billion while simultaneously paying off $1.5 billion in debt. A key detail: 95% of the funds for the purchase came not from selling common stock but from issuing preferred securities, STRC (Stretch). Only 5% came from common shares.
This shift has become a major topic of discussion in the crypto community.
How the Company’s Financial “Machine” Works
Strategy has several sources of capital.
Common stock (MSTR) is issued through an ATM program. Each new issuance dilutes the shares of existing holders, which is why the ATM program causes the most frustration among shareholders.
Convertible bonds serve as a tool for institutional investors. Investment banks sell exposure to MSTR through these bonds. Some of these bonds have a zero coupon but come with the right to convert into shares at a predetermined price.
Preferred securities, including STRC, are a different story. According to Blockspace Live podcast hosts Charlie Spears and Colin Harper, this is a “retail play”: institutions rarely buy them, and if they do, it's only a small portion of their portfolio. STRC pays dividends of about 11%.
The choice of instrument depends on market conditions. When Bitcoin's volatility is low and prices are stagnant, there is little demand for new shares—selling them would require “unfavorable pricing.” During such periods, it is more advantageous for the company to issue STRC. However, this approach has a downside: dividends must be paid on preferred securities, and these obligations are persistent.
The Pyramid Debate: Arguments For and Against
The question of whether Strategy is a pyramid scheme has been discussed for a long time. An analysis by Mark Meldrum on Reddit sparked a lengthy discussion. Proponents of this theory argue that payments to current investors are essentially funded by new issuances, and the Bitcoin on the balance sheet only generates “theoretical” profits until it is sold.
A counterargument in the same thread states that borrowing against an asset for investment is standard practice. Real estate and stocks are regularly financed this way, and the principle itself does not make the model a pyramid scheme. The difference is that Strategy is buying a volatile asset without a stable price.
Similar points are discussed on other platforms, such as a LinkedIn post where private equity manager Sasha Jovanovic examines the topic through the lens of corporate finance.
According to the expert, the company uses Bitcoin as its primary unit of account. In 2025, the return on shares in the leading cryptocurrency was 22.8%. Jovanovic emphasized that this data is transparent and auditable, whereas in Ponzi schemes, returns are hidden or fabricated.
Strategy directs new capital to purchase digital gold for reserves, rather than to pay previous investors. This model creates a “flywheel”: the rising price of the asset allows for raising funds through bonds and additional stock issuance for new purchases.
Jovanovic noted that the company does not hide volatility; it monetizes it. Over the year, the structure issued debt instruments worth $7 billion. He emphasized that even with a 90% drop in the asset price (to $8,000), the reserves would cover the net debt.
Jovanovic concluded that accusations of creating a pyramid scheme stem from a misunderstanding of the company's balance mechanics and the use of unconventional treasury management methods.
Users on the r/CryptoCurrency subreddit point out how Saylor's own statements highlight vulnerabilities in the MSTR structure. Skeptics have compared the situation to the 2008 mortgage crisis, where financial institutions also used high leverage and overvalued assets. However, other users noted that Strategy's reserves are too small to create a systemic shock in the economy.
In reality, the risks appear modest. The proportion of convertible debt is small relative to the value of Bitcoin reserves, and many bond rates are close to zero. This reduces the likelihood of a forced collapse of the scheme, although it does not eliminate the question of how to meet obligations without selling Bitcoin.
Why Sell Bitcoin
The main news in recent weeks has been the sale of a small amount of the leading cryptocurrency. Meanwhile, Saylor has repeatedly stated that he would not sell digital gold.
Never sell your Bitcoin.
— Michael Saylor (@saylor) February 2, 2025
On the Blockspace Live podcast, the sale was described more as a signal than a transaction for profit.
The idea is this: Saylor shows the market that he is not so stubborn as to never touch the reserves. It would be much more concerning if he outright refused to sell at all. The volume is so small that it hardly affects the balance—but it has sparked extensive discussion.
Here, an important term emerged—reflexivity. Previously, the scheme worked like this: Strategy issues shares, buys Bitcoin, and MSTR prices rise. Now the logic has reversed. When the company sells digital gold, its shares drop more than Bitcoin itself, and the sale further pressures the asset's price. Being a major player provides advantages but also creates a trap.
Simultaneously, the public landscape is changing. Participants in the Blockspace Live podcast noted that Saylor is facing noticeable “competition for attention” for the first time—such as Jeff Walton, who is building an image as a more understandable and risk-oriented speaker.
Coffeezilla just debated Jeff Walton for an hour about bitcoin and Michael Saylor’s digital credit business.
If you don’t know him, @Coffeebreak_YT has become the most popular YouTuber focused on exposing crypto scams and is skeptical of the strategy. pic.twitter.com/8LWYDxyY5a
— Documenting ₿itcoin 📄 (@DocumentingBTC) May 7, 2026
Why Pay Off These Bonds
Spears and Harper analyzed an unexpected move by Strategy: the company paid off convertible bonds maturing in 2029 with a conversion price above $670. Notably, this issuance was neither the closest to the payment date nor did it have the highest rate.
The 2029 bonds have minimal intrinsic value: the market hardly prices in the value of the embedded conversion option, estimating it at nearly zero. This means the company spends the least cash per dollar of debt paid off. This makes them the least costly for early redemption.
This indicates not so much a forecast of the stock's value but a desire to reduce debt with minimal costs per unit of redemption. After the transaction, the company has about $6.5 billion in convertible debt maturing by 2032.
This creates internal tension in the model. MSTR holders want less dilution. STRC holders want cash reserves to flow freely for dividends. Satisfying both groups simultaneously is challenging, and the company is currently leaning towards STRC.
Who Actually Holds These Securities
The picture is completed by data from Dovey Wan, managing partner at Primitive Ventures: about 80% of STRC holders are retail investors, and around 40% of MSTR shareholders are also retail. Wan acknowledged that the idea of an “embedded pyramid” in STRC does not seem to be supported.
80% of $STRC holders are retail investors
40% of $MSTR holders are retailWas thinking STRC was an insiti ponzi but apparently not 🤔
— Dovey "Rug the fiat" Wan (hiring) (@DoveyWan) May 8, 2026
This explains why the issue of dividends is so sensitive. According to Blockspace Live participants, the balance sheet includes about six months of STRC dividend payments. Beyond that, the company essentially has two paths: reduce the dividend on STRC or sell Bitcoin.
It is the latter scenario that worries the market. It’s not about the small amounts sold, but the fear that sales could increase to cover dividends. The hosts of Blockspace Live believe the likelihood of an “explosion” is low, but acknowledge that with $50 billion in Bitcoin, even a hint of a large-scale sell-off unnerves market participants.
Moreover, the recent decline in the crypto market has been linked not so much to Strategy as to a capital shift towards artificial intelligence, amid anticipated IPOs from SpaceX, Anthropic, and OpenAI. Bitcoin's volatility is at a near ten-month low.
What Critics Are Saying
Peter Schiff, president of Euro Pacific Capital, stated that MSTR is the “largest buyer of Bitcoin and the biggest loser.”
$MSTR Is the biggest Bitcoin buyer and the biggest Bitcoin loser. Strategy has been buying Bitcoin for over five years, and so far that "investment" has netted an unrealized $12 billion loss. If a genius like @saylor can't even make money in Bitcoin why should anyone else try?
— Peter Schiff (@PeterSchiff) June 4, 2026
According to his calculations, after over five years of purchases, the unrealized loss has reached $12 billion, and if “even a genius like Saylor cannot make money in Bitcoin, why should anyone else try?”
Institutional voices are also joining the criticism. Jeff Dorman, chief investment officer at Arca, described the situation with Strategy's preferred securities as “out of control,” pointing to a scale of around $15 billion in such issuances.
Attention to the company is growing in major media outlets. A significant piece on Saylor and Strategy was published by The New York Times—an indication that the story has extended far beyond the crypto industry.
What to Watch Going Forward
Strategy is not a classic pyramid in the legal sense. In practice, it all hinges on two things: the price of Bitcoin and the ability to attract new capital.
The main questions for the near future boil down to three:
- Will the company continue to service dividends on STRC without significant Bitcoin sales?
- Can it close the remaining $6.5 billion in convertible debt without resorting to mass asset dumping?
- Will retail demand for preferred securities remain if Bitcoin surges and makes common stock a more convenient way to raise funds?
For now, Strategy manages to maintain a balance between signaling to the market and meeting real obligations.