MicroStrategy Halts Bitcoin Purchases...Due to Structural Limitations?

▲ Michael Saylor, Strategy (MSTR)/ChatGPT generated image

Strategy (MicroStrategy), long considered a symbol of Bitcoin (BTC) accumulation, has unusually announced a halt to its purchases, fueling market skepticism. This is a result of both limitations in its funding structure and a strategic decision ahead of its earnings announcement.

According to crypto media outlet U.Today on May 3 (local time), MicroStrategy Chairman Michael Saylor stated that the weekly Bitcoin purchase announcement, which had been made every Sunday, was absent this week. The halt in the aggressive Bitcoin accumulation trend is attributed to the weakening functionality of Stretch Preferred Stock (STRC), a funding instrument. STRC, which boasts an annual return of 11.5%, generates capital only when its share price trades above its par value of $100. However, with the stock price remaining below $100 for the past two weeks, the appeal for new capital inflows has significantly diminished.

MicroStrategy also did not proceed with a market-issued stock sale. This is interpreted as an intention to curb stock price overheating ahead of its Q1 2026 earnings announcement scheduled for May 5, following the purchase of 3,273 BTC in late April. With funding channels simultaneously facing restrictions, the view that the Bitcoin acquisition strategy itself has structural vulnerabilities is gaining traction.

Peter Schiff, Chairman of Euro Pacific Capital and a prominent skeptic, criticized STRC, calling it the clearest Ponzi scheme in history. Schiff argued that the very structure, which requires Bitcoin's price to rise by more than 11.5% annually to maintain dividends, is akin to a dangerous gamble, and he pointed out that it is being packaged as a corporate strategy.

In response, Phong Le, CEO of MicroStrategy, strongly refuted the claims. Le emphasized that the assets are publicly disclosed on-chain and institutional investors participate with a full understanding of the leveraged structure, drawing a clear distinction that it is fundamentally different from a typical Ponzi scheme based on opacity. Currently, MicroStrategy holds approximately 818,334 BTC, with an average purchase price of $75,537, still maintaining a profitable position.

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