The Great Rotation Has Begun… Here’s How to Make Your Money Back

Peter Schiff argues that MicroStrategy (now called Strategy) is caught in a self-reinforcing “death spiral” driven by its flagship preferred stock, STRC, which he says is a Ponzi scheme that can no longer keep its promises. He frames the unraveling as a warning that holders of Strategy stock and related products could face steep losses, lawsuits, and a possible bankruptcy.

According to Peter Schiff, the mechanism is simple: STRC was marketed as a stable, income-oriented security paying about 11.5% while its price stayed near its $100 par value. Schiff says that yield was not backed by the operating business, which he describes as a small software company, but by continually selling new preferreds to pay existing holders. When STRC fell to around $93 to $94, he concluded the company could no longer sell new preferreds, and that falling Bitcoin and a discount to net asset value would make further Bitcoin purchases dilutive to shareholders.

Peter Schiff points to recent market moves as confirmation: Strategy stock fell about 30% in a week and roughly 32% since his June 5 podcast, while STRC dropped to a low near $71. He also predicts a wave of class action lawsuits from both preferred and common shareholders, and says the company’s preferred shares would sit ahead of common equity in any bankruptcy. Schiff further argues that Bitcoin, gold, and silver each face distinct trajectories, and that investors seeking to recoup losses should consider physical precious metals.

Key takeaways

• Peter Schiff calls STRC a Ponzi scheme because its 11.5% payouts were funded by new investor money rather than business profits.
• STRC’s drop below its $100 par value, to roughly $93 to $94 and later near $71, signaled to Schiff that the model was breaking.
• Schiff argues that selling common stock at a discount to buy Bitcoin destroys shareholder value per share.
• He expects lawsuits from preferred and common shareholders, and says preferred holders rank above common equity in bankruptcy.
• Peter Schiff says gold and silver remain strong buying opportunities, with silver able to recover from around $60 toward $120.