MicroStrategy may sell BTC to pay dividends warns Schiff

Dividend post sparks debate

The controversy began after a user shared an email from their father, celebrating the overnight increase in his MSTR shares following a dividend payment credited to his brokerage account. The user said that by reinvesting these dividends, he was able to generate higher supplementary income than with traditional bank products.

Schiff argued that MicroStrategy is fundamentally different from classic income-generating assets, suggesting that its continued ability to pay dividends depends on raising new capital or selling a portion of its Bitcoin holdings.

The post attracted attention during a period of weakness in the crypto markets. Many X users emphasized that owning MicroStrategy shares provides indirect exposure to Bitcoin, allowing investors to participate in the cryptocurrency’s upside without directly buying the asset. MicroStrategy, a software and treasury management firm, is notable for holding significant amounts of Bitcoin in its balance sheet.

Schiff’s harsh criticism of MicroStrategy

Peter Schiff rejected the optimistic narrative, launching scathing criticism at both the operational and legal structure of MicroStrategy, in line with his previous remarks. According to Schiff, MSTR stock cannot be compared to assets that consistently generate income through productive economic activities.

He stressed that the company’s ability to make payments to shareholders does not derive from sustainable operational cash flows, but instead depends on its capacity to source new funding. For this reason, Schiff suggested that the positive sentiment around MicroStrategy may be misleading to investors.

Warning about potential Bitcoin sale

Schiff’s most notable claim centered on the company’s Bitcoin reserves. He argued that if MicroStrategy cannot raise additional capital to maintain its dividend policy, it may ultimately have to sell some of its Bitcoin assets. In such a situation, Schiff warned that this could exert significant downward pressure on the price of Bitcoin.

Despite these concerns, some X users contended that MSTR stock may offer a unique way for investors to earn returns even during market downturns. The debate has brought new focus to whether MicroStrategy’s Bitcoin-heavy balance sheet represents an opportunity or a risk for shareholders.