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Concerns over Strategy’s leveraged Bitcoin strategy resurfaced this week as critics questioned whether Michael Saylor’s company could withstand prolonged market pressure. But according to Arca chief investment officer Jeff Dorman, much of the fear circulating online is based on misinformation rather than the company’s actual financial structure.
The renewed debate came following a series of comments from gold advocate and longtime Bitcoin critic Peter Schiff, who argued that Strategy — formerly MicroStrategy and now trading under the ticker MSTR — is at risk of entering a “death spiral” if demand for its preferred shares declines. Schiff has long criticized Saylor’s approach, and he again predicted that the company “will eventually go bankrupt,” even inviting Saylor to debate him at Binance Blockchain Week in Dubai.
Dorman Rejects Forced-Selling Claims
In response, Dorman posted on X pushing back against what he called “stupid, inaccurate takes” surrounding Strategy’s financial health. While he did not mention Schiff by name, his comments targeted the broader narrative suggesting Strategy could be forced to sell its Bitcoin holdings during market downturns.
According to Dorman, this scenario is highly unlikely for several reasons:
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Strong board control: Saylor controls roughly 42% of voting power, making an activist takeover or forced restructuring “almost impossible.”
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Debt structure without liquidation triggers: None of Strategy’s outstanding debt includes covenants that would require selling Bitcoin to maintain compliance.
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Positive cash flow: The company’s legacy software business continues to generate revenue, which helps support interest obligations.
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Common lending behavior: Dorman added that companies rarely default simply because debt maturity dates approach. In practice, lenders often negotiate extensions, a dynamic he referred to as the industry’s familiar “extend and pretend” model.
Dorman’s comments aim to counter the growing perception online that Strategy’s leveraged Bitcoin strategy could lead to mandatory asset liquidation. He emphasized that while the firm has taken on debt to expand its Bitcoin reserves, the structure of those obligations gives Strategy considerable flexibility.
Schiff Levels New Criticism at Strategy’s Model
Schiff’s arguments center on the firm’s preferred equity program, which offers high yields to investors. He claims those yields are unsustainable and that the entire structure depends on attracting income-focused buyers.
He also suggested that reduced demand could trigger a downward cycle that places stress on the company’s financial model. To amplify his concerns, Schiff publicly challenged Saylor to debate him, signaling an attempt to draw more attention to the issue amid Bitcoin’s recent price volatility.
Market Performance Adds Fuel to the Discussion
Strategy’s stock has faced pressure throughout 2025 even as the company continues to acquire additional Bitcoin. Shares closed at $199.74 on Friday, down 4.22% for the day and over 33% year to date. In comparison, Bitcoin has delivered a modest 0.4% gain over the same period, despite significant volatility.
The decline has only intensified scrutiny of Strategy’s leveraged position. Critics argue that falling BTC prices could pressure Strategy’s balance sheet, while supporters maintain that the firm is structured to weather downturns.
Strategy’s Valuation Remains Near Net Asset Levels
Data from StrategyTracker shows that Strategy currently trades at a diluted market net asset value (mNAV) multiple of 1.06x. This metric attempts to assess the company’s value based on its Bitcoin holdings after accounting for the potential dilution from options, warrants, and convertible debt.
A 1.06x multiple suggests that Strategy is trading only slightly above its estimated Bitcoin-backed value — a sign that the market views the company’s fundamentals with caution but not distress.
Bitcoin Market Adds Context to the Conversation
The broader Bitcoin market has been under pressure as well. BTC recently slipped toward the $94,000 level, briefly erasing year-to-date gains. Market volatility, shifting liquidity conditions, and uncertainty following U.S. government actions have all contributed to significant price swings.
Strategy’s performance often moves in tandem with these trends, and the decline has reignited debates over the sustainability of its Bitcoin-heavy capital strategy.
Looking Ahead
For now, Dorman’s take suggests that fears of forced Bitcoin selling are overstated. With strong governance, flexible debt terms, and ongoing cash flow from its software business, Strategy appears positioned to continue executing its BTC-focused strategy — even in a challenging market.
Still, as Bitcoin remains volatile, Strategy’s leveraged approach will likely continue to attract both supporters and critics, ensuring the debate stays alive through the next market cycle.
