Bitcoin critic Peter Schiff questioned a 7% rally in Strategy shares after another stock sale pushed the company’s Bitcoin yield to 4.5%.
Peter Schiff, the gold advocate and longtime Bitcoin critic, told bullish investors they would be better off owning Bitcoin directly after Strategy’s closely watched Bitcoin yield fell sharply.
In an X post on Monday, July 27, Schiff questioned why MSTR shares were up about 7% on Monday after Strategy sold another 5.4 million common shares without buying any Bitcoin.
As Schiff argued, the latest issuance reduced Strategy’s year-to-date BTC▲$62,630.00 yield to 4.5%, down from 13.3% on May 25, a decline of about 66%. He added:
“If you’re bullish, you’re better off just owning Bitcoin.”
- But Strategy’s Bitcoin yield isn’t an investment return. It is a measure that tracks how much the amount of BTC backing each diluted common share has increased.
- Even Strategy itself warns that the figure isn’t equivalent to yield in the traditional financial sense.
- The metric rises when Strategy adds Bitcoin faster than it issues shares. It also falls when its share count grows faster than its Bitcoin holdings, as has happened during the company’s recent shift toward raising cash.
Strategy held about 843,740 BTC on May 25 and approximately 843,775 BTC as of July 26, a net increase of only 37 BTC. During the latest week alone, it issued 5.4 million MSTR shares for $544.5 million, but bought no Bitcoin.
Read also: Strategy’s Bitcoin Buying Freeze Hits Four Weeks as Cash Pile Grows
Cash Replaces Bitcoin Buying
Rather than use the proceeds for Bitcoin, Strategy added $525 million to its dollar reserve, bringing the balance to $3.7 billion, and spent $25 million buying back its STRC preferred shares, Bitcoin Foundation reported on Monday.
The company has now gone five straight weeks without purchasing Bitcoin.
Strategy last changed its holdings on July 5, when it completed the sale of 3,588 BTC for about $216 million to fund preferred-stock distributions and replenish the reserve.
Read more: Strategy Sells $467 Million in MSTR Stock — But Buys No Bitcoin
