Bitcoin fell 19% during the year, Schiff bombarded MicroStrategy (MSTR.US): Is the 12% dividend rate in the air?

According to Woofun AI, economist Peter Schiff harshly questioned the 12% yield claimed by STRC Yield Securities under MicroStrategy (MSTR.US). The core argument is that this revenue model is highly dependent on Bitcoin's continued appreciation, and Bitcoin has recorded an annual decline of 18.93% in 2026. This reality directly shakes the foundation of its dividend logic.

This questioning did not come out of nowhere, but stemmed from a huge contrast between long-term optimistic forecasts and sharp short-term declines. Michael Saylor, founder and executive chairman of MicroStrategy, asserted in an interview with CNBC in June 2025 that Bitcoin will appreciate at an average annual rate of about 30% over the next 20 years; even in a more recent Bloomberg interview on October 13, 2026, he insisted that Bitcoin's annual growth rate will be between 20% and 30% over the next 20 years.

However, market trends gave a very different answer. Peter Schiff wrote on the X platform on November 12, 2026, that Bitcoin fell 6.5% in 2025, and the decline has reached 17% since 2026, so there is no reason to support Bitcoin's ability to maintain a 30% appreciation rate. At the time of writing, Bitcoin was trading at around $70,900, with a cumulative decline of 18.93% in 2026, further confirming the downward trend mentioned by Schiff. Looking at short-term fluctuations, the price of Bitcoin fell by 3.74% in the past 24 hours, by 6.3% in 7 days, and by 14.52% in 1 month. Its price is even 30.10% lower than a year ago.

It is worth noting that MSTR, as a microstrategy common stock code, is fundamentally different from STRC stocks used to generate revenue. Schiff's criticism points directly to the economic logic behind STRC: that is, assuming that MSTR's Bitcoin holdings can appreciate 30% each year, the company can only be able to pay an annual yield of 12% to STRC shareholders and achieve profits. When this assumption is falsified by the market, the fragility of the entire revenue model is revealed.

To understand the heart of this dispute, an in-depth analysis of how STRC Securities works is necessary. MicroStrategy's STRC securities have a dynamically changing dividend rate, which is calculated on a basis of $100 per share, corresponding to an annual dividend rate of 12%, which means that each share can receive an annual dividend of $12. The real rate of return is the percentage obtained by dividing the annual dividend income by the purchase price. The company evaluates this ratio every month to keep the stock price around $100. Shareholders approved the STRC dividend daily accrual mechanism in October, which means that starting November 1, dividends will be calculated cumulatively every day.

This accumulation process includes weekends and holidays, but actual dividend payments are only made on weekdays. More frequent payouts will only change the timing of dividend payments, without increasing annualized yields. Investors holding STRC are entitled to a distribution of the proceeds from the issuing company, which is in stark contrast to investors directly holding Bitcoin's right to own the cryptocurrency itself.

The underlying reason is that while the rise in the price of Bitcoin can increase the asset value of micro strategies, unrealized gains are not automatically converted into funds that can be used for dividends. Dividend payments require the company's own cash, which can only come from financing activities or asset sales, not book profits.

Data compiled by Woofun AI shows that this mechanism closely binds investors' earnings expectations to the company's ability to manage cash flow. Once asset prices fall and financing capacity is limited, dividend payment pressure will rise sharply.

The tight capital chain and liquidity risks have become the focus of market attention. According to the financial report for the third quarter of 2026 released by MicroStrategy, the company raised approximately US$431.8 million through the sale of Bitcoin during 2026, specifically to pay dividends on some preferred shares and repurchase STRC shares. As of October 25, the company's dollar assets were $50.7 billion, and these assets are said to be sufficient to cover approximately 3.4 years of dividend and interest payments. The act of repurchasing refers to buying back shares from investors, thereby reducing the number of shares that will need to pay dividends in the future. This relieves long-term cash outflow pressure to a certain extent.

However, brokerage and financial services company Schw.US (SCHW.US) pointed out the volatility of financial data and possible liquidity pressure when evaluating the risk of Bitcoin assets. The so-called liquidity pressure means that when the value of Bitcoin assets falls, it is difficult for companies to fulfill their cash payment obligations. Under the market value accounting system, changes in the value of these assets will also be reflected in financial reports as unrealized gains or losses, further exacerbating financial uncertainty. Between November 2 and 8, MicroStrategy purchased an additional 1,036 bitcoins worth $81.9 million, while also buying back preferred shares worth $188.3 million, all from the sale of common shares. So far, the total number of bitcoins held by MicroStrategy has reached 850,364, and the total acquisition cost is US$641.6 billion. As of November 8, the company had reserves of $4.77 billion to pay dividends on preferred shares and interest on debt, in addition to $146.2 million in separate cash reserves.

Although the book reserves seem sufficient, in the context of the continued slump in Bitcoin prices, maintaining such huge holdings and dividend payment obligations places extremely high demands on cash flow.

Michael Saylor tried to defend this model from a historical perspective. He traced the MicroStrategy model of financing Bitcoin holdings through yield stocks to 400 years of financial history, implying that it is deeply supported by financial logic. However, in the current market environment, this historical analogy makes it difficult to dispel investors' concerns about short-term liquidity. Article author Kevin Helms is a cryptocurrency industry journalist focusing on Bitcoin, blockchain regulation, and the global digital asset market. In a report published at 9:05 p.m. EST on November 12, 2026, he objectively presented the full picture of this controversy through data provided by the MarketScreener media platform. As the price of Bitcoin falls below the $71,000 mark, MicroStrategy's earnings model is facing an unprecedented stress test, and market participants need to pay close attention to its subsequent capital operations and asset disposal strategies.