Bitcoin Dips 50% After Strategy's STRC Launch — Critics Cry 'Ponzi'
By John Nada·Jun 21, 2026·3 min read
Bitcoin plunges 50% since Strategy's STRC launch. Critics call it a 'Ponzi', while others cite leverage issues.
Bitcoin has tumbled roughly 50% since July 2025, when Michael Saylor’s Strategy introduced its Bitcoin-funding vehicle, Stretch (STRC). STRC, launched with the ambition to trade near its $100 par value, now languishes at a steep discount, as low as $82.53, reports Cointelegraph.
STRC's troubles have critics like Peter Schiff labeling it a "classic centralized Ponzi," alleging its sustainability relies on Strategy's ability to continually raise fresh capital. However, others attribute STRC's price drop to leverage wipeouts, not fundamental flaws. Schiff's critiques echo a sentiment among skeptics who view the current trading discount as evidence of a flawed financial model that requires constant inflows to maintain its operations. Nevertheless, this perspective is not universally accepted, as some analysts point to external market factors impacting STRC's valuation.
Initially, STRC was meant to provide investors with adjustable dividends, currently set at 11.5% annually. This dividend setup was supposed to align the instrument's trading value with its par value, yet the widening discount has pushed the yield above 12.9%, halting at-the-market share issuance. This slowdown threatens the flywheel effect that once fueled Strategy’s Bitcoin treasure chest, now holding over 846,000 BTC. In finance, a flywheel effect refers to a self-reinforcing business model where growth in one area directly supports expansion in another.
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Strategy's Bitcoin purchasing pace has noticeably decelerated. The company added 1,550 BTC for $101 million in one week and then 1,587 BTC for $100 million the next. Compared to April's aggressive buy of 34,164 BTC for $2.54 billion, June’s purchases have been relatively modest. The declining STRC price has also coincided with a minor sale of 32 BTC, worth about $2.5 million, to meet dividend needs. This sale, although small in relation to Strategy's overall holdings, highlights the pressures the company faces in maintaining its financial commitments amid reduced funding efficiency from STRC.
Some analysts argue that the STRC sell-off resembles a leverage wipeout more than a structural breakdown. Jesse Myers from The Smarter Web Company claims Strategy is equipped to handle its dividend payout for decades if Bitcoin appreciates at just 2% annually. This assertion is supported by the fact that STRC’s long stretch near $99–$100 encouraged investors to use heavy leverage, with some assuming the instrument would stay above $95. Once the price slipped, margin calls and forced selling accelerated the decline.
The deep discount might even lure income-focused investors, offering effective yields of 13% at current prices. Analyst Scott Melker noted that STRC's dividends are based on the $100 liquidation preference, not the market price, meaning that buyers at $90 earn about 12.8%, while those at $85 see yields of roughly 13.5%. This attractive yield could potentially draw investors who prioritize income over capital appreciation.
Strategy might reveal its next dividend rate on June 30, while retaining options like MSTR share issuance and using cash reserves to fund future Bitcoin acquisitions. Despite ongoing criticisms, the company continues to present STRC as a preferred equity vehicle, backed by its substantial Bitcoin-focused treasury strategy. This approach reflects Strategy's commitment to its existing financial framework, even amidst market volatility and external skepticism.