Peter Schiff criticised Strategy's (formerly MicroStrategy) bitcoin buying strategy, saying it no longer works.

On June 16 (local time), blockchain media outlet U.Today reported that Schiff claimed Strategy's so-called "infinite financing" structure has now fundamentally broken down.

Schiff focused his criticism on the financing method. Strategy has issued new shares or convertible bonds by leveraging a stock price that traded at a premium to the net asset value (NAV) of its bitcoin holdings. When the stock traded at a premium, newly issued shares could instead increase bitcoin held per share.

Schiff said the situation has changed. He said, "Sales in the past were made at a premium, but sales now are made at a discounted price." That means the market is no longer accepting Strategy's financing structure on the same terms.

At the centre of the controversy is an additional purchase of 1,550 BTC announced earlier this month. Strategy bought more bitcoin by investing $101 million, but Schiff said the structure reduced bitcoin held per share and produced a negative bitcoin yield. He said that even if total bitcoin holdings increased, the bitcoin exposure per share that shareholders indirectly hold weakened.

He also cited market price swings as grounds for criticism. Schiff said that immediately after the 1,550 BTC purchase the market entered a correction and that transaction alone immediately moved into a loss of more than $6 million. He highlighted that the additional purchase did not directly lead to results.

He also raised concerns about trust in financing tools. Schiff said that if STRC cannot return to around par value, Strategy may have to raise its dividend. He warned that if market confidence in debt-like financing weakens, funding costs could rise.

Schiff therefore presented what he called the most reasonable current choice: "sell bitcoin and buy back discounted shares." He argued that instead of raising new funds to buy more bitcoin, it would be better to take advantage of the lower share price itself.

He also warned investors. Schiff said that even if someone is very optimistic about bitcoin's price outlook, holding MSTR may be an unfavourable choice. He claimed, "Even for bitcoin bulls, holding MSTR is the worst way."