Bitcoin (BTC) is down approximately 50% since Michael Saylor Strategy launched Stretch (STRC), its flagship Bitcoin financing vehicle, in delayed July 2025.

BTC/USD monthly chart. Source: TradingView

Key takeaways:

• STRC operates like a classic Ponzi scheme, argue Peter Schiff and other critics.
• Other analysts disagree, noting that STRC’s decline below its $100 par value is due to the disappearance of leverage.

Critics say STRC looks like ‘classic centralized Ponzi’

STRC was designed to trade near the $100 par value, allowing Strategy to raise capital to purchase more Bitcoin. The instrument is currently trading at a deep discount, which suggests that the BTC purchase channel is under pressure.

On Thursday, STRC fell to a record low of $82.53 before closing at $88.59, still below the $100 par value.

STRC daily chart. Source: TradingView

Launched in July 2025, the STRC was intended to enable near-par trading thanks to regulated dividends, currently at 11.5% annualized, with the proceeds mainly used to purchase Bitcoin.

The growing discount raised the effective yield of STRC above 12.9% and contributed to the suspension of share issues on the market. This threatens to ponderous down the capital raising flywheel behind Strategy’s Bitcoin vault, which currently holds over 846,000 BTC.

In finance, a “flywheel” is a self-reinforcing business model in which an raise in one indicator directly helps to raise another, increasing momentum.

However, trading 13% below par has revived criticism of the Strategy’s financing model.

Bitcoin critic Peter Schiff has repeatedly described STRC as a “classic centralized Ponzi,” arguing that it depends on Strategy’s ability to raise fresh capital by selling up-to-date shares or selling Bitcoin to meet its obligations.

Source: X/Peter Schiff

Cryptocurrency trader DonAlt too questioned recent STRC price action asking why the instrument was “trading like a Ponzi” after plummeting below par.

The strategy has not directly addressed this in recent statements, instead continuing to present STRC as preferred equity backed by a Bitcoin-focused treasury strategy.

However, the company has moved STRC to a semi-monthly dividend schedule, with payments now scheduled to occur twice a month rather than monthly.

The strategy’s rate of Bitcoin purchases slows as STRC declines

Strategy’s rate of Bitcoin accumulation plummeted as STRC transactions fell below par.

The company added 1,550 BTC for $101 million in the week ending June 8 and another 1,587 BTC for $100 million in the week ending June 15, bringing its total holdings to 846,842 BTC.

These were significant purchases, but were much smaller than Strategy’s weekly purchases in early 2026.

For example, in April, Strategy purchased 34,164 BTC for $2.54 billion in one week. In May, it added another 24,869 BTC for approximately $2.01 billion. By contrast, weekly additions in June were closer to $100 million each.

The slowdown also coincided with a compact but notable sale of 32 BTC in early June worth approximately $2.5 million to aid cover dividend obligations.

Related: Bitcoin price sets the lowest level in a week at 64.5 thousand. dollars as concerns about selling the strategy resurface

The sale was compact compared to Strategy’s overall Bitcoin portfolio, but showed that cash commitments could still force circumscribed BTC sales as STRC-led funding becomes less effective.

Weekly BTC purchase estimates hosted by STRC. Source: LIVE SITE

The analyst says STRC’s decline represents a loss of leverage

According to Jesse Myers, head of Bitcoin strategy at The Smarter Web Company, the STRC sell-off was more akin to a loss of leverage than a deterioration in Strategy’s fundamentals.

“The strategy is fine,” he said he said in a post on Thursday, adding that the company could pay STRC dividends for 32 years if conditions remain unchanged, and indefinitely if Bitcoin appreciates in value by about 2% annually.

STRC’s long period around $99-$100 encouraged investors to employ high leverage, with some betting that the instrument would stay above $95. As the price fell, margin calls and forced selling accelerated the decline.

Discounts can also attract income buyers, according to analyst Scott Melker.

In Sunday’s post, he noted that STRC’s dividends are based on the $100 preferential liquidation price, not the market price. At a dividend yield of 11.5%, buyers earning $90 earn about 12.8%, while buyers earning $85 earn about 13.5%.

Source: X/Scott Melker

At current prices, STRC offers an effective efficiency of around 13%. Strategy could declare another dividend rate on June 30 while retaining other options, including issuing MSTR shares and cash reserves, to fund Bitcoin purchases.