Strategy Inc's Preferred Stock Model Faces Potential 'Death Spiral'

Peter Schiff, a well-known critic of Bitcoin, has warned of a potential 'death spiral' in Strategy Inc's (MSTR) preferred stock model. The model, known as STRC, offers a yield of around 11.5% but relies heavily on the performance of Bitcoin's price. According to Schiff, if market conditions deteriorate, the model could face significant pressure, potentially leading to a 'death spiral'.

However, Strategy Inc's CEO Phong Le has pushed back against Schiff's criticism, stating that the company's model is transparent and does not involve unsustainable practices. In an interview, Le explained that dividends are funded separately through the issuance of common equity at a premium to the company's net asset value, rather than relying on investor funds.

Meanwhile, US Treasury Secretary Scott Bessent has announced that the department will target Iran-linked financial networks under its 'Economic Fury' campaign. As part of this effort, Tether has frozen $344 million in cryptocurrency tied to Tehran, marking one of the largest stablecoin-related enforcement actions to date.