Michael Saylor’s recent decision to finance additional Bitcoin acquisitions has sparked renewed discussions about the sustainability of his ambitious strategy. The firm now known as Strategy (previously MicroStrategy) has declared its plan to issue a new type of perpetual preferred stock called STRF (“Strife”), which offers a 10% annual dividend. While some view this as a creative method for increasing BTC holdings, critics caution that the financial obligation of cash dividends could become unmanageable if Bitcoin values decrease sharply.
Is Saylor Poised to Trigger the Next Bitcoin Bear Market?
On X, Strategy announced its STRF (Strife) offering, aimed at institutional and select non-institutional investors. The company stated that the funds raised would be utilized for general corporate needs, including working capital, as well as Bitcoin acquisitions, albeit contingent upon market and other factors.
Strategy indicated that STRF will yield cumulative dividends of 10% per year, with the first cash dividend set for June 30, 2025, followed by quarterly payments. Observers quickly recognized that such a generous payout could stretch the company’s finances, as its balance sheet is heavily invested in Bitcoin rather than traditional revenue sources.
Among initial detractors was WhalePanda (@WhalePanda), a co-host of the Magical Crypto Friends YouTube channel, who contended that the 10% dividend—potentially translating to $50 million annually if $500 million is raised—is too excessive given the company’s current setup. He remarked: “I’ve said it before that Saylor is going to bring the next Bitcoin bear market. This seems desperate. A 10% dividend on $500 million means $50 million annually, payable in cash… they don’t have that cash.”
Another critic, Simon Dixon, a former investment banker turned Bitcoin advocate, drew a notable comparison between Strategy’s move and the infamous downfall of Long-Term Capital Management (LTCM) in the late 1990s. Though he did not equate the two situations directly, Dixon suggested that promising such a high fixed dividend without sufficient dollar revenue constitutes a significant risk.
Despite the critical views, not all industry voices align with the pessimistic perspective. Some believe that Saylor’s proven track record in boosting Strategy’s Bitcoin reserves—and the relative simplicity of its balance sheet in comparison to LTCM—provides a substantial buffer. David Bailey, CEO of BTC Inc, emphasized Saylor’s deep investment in Bitcoin: “Saylor literally has more skin in the game than anyone alive… If you don’t like the stock, don’t buy it, plain and simple.”
At the time of reporting, Bitcoin was trading at $83,454.
