Bitcoin (BTC) has fallen nearly 50% since Michael Siler’s strategy launched Stretch (STRC), his main Bitcoin funding vehicle, in late July 2025.

BTC/USD Monthly Chart. Source: TradingView

Important Points:

• Peter Schiff and other critics say STRC is operating like a classic Ponzi scheme.
• Other analysts disagree, noting that STRC’s fall below $100 par is due to the elimination of leverage.

Critics say STRC looks like a “classic centralized Ponzi”.

STRC was designed to trade near its $100 par value, enabling a strategy to raise capital to buy more Bitcoin. The instrument is now trading at a deep discount, suggesting that the BTC buying channel is under pressure.

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

STRC Daily Chart. Source: TradingView

Launched in July 2025, STRC was designed to trade equity through adjustable dividends, currently at 11.5% per annum, with earnings primarily used to acquire bitcoin.

The widening discount has pushed STRC’s effective yield above 12.9% and contributed to the lag in market share issuance. That threatens to slow the capital-raising flywheel behind the strategy’s bitcoin treasury, which now holds more than 846,000 BTC.

In finance, the “flywheel” is a self-reinforcing business model where an increase in one metric directly helps increase another, compounding momentum.

But trading 13% below par has renewed criticism of the strategy’s funding model.

Bitcoin critic Peter Schiff has repeatedly described STRC as “a classic centralized Ponzi”, arguing that the strategy depends on the ability to raise fresh capital through the sale of new shares or sell bitcoin to cover liabilities.

Source: x/Peter Schiff

Also crypto trader DonAlt asked STRC’s recent price action, asking why the instrument is “trading like a Ponzi” after it moved below par.

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

However, the company has moved STRC to a semi-monthly dividend schedule, with payments now designed to be bi-monthly instead of monthly.

The strategy’s bitcoin buying pace slows down as STRC falls.

The strategy’s bitcoin accumulation has slowed sharply as STRC trades 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 total holdings to 846,842 BTC.

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

For example, in April, the strategy bought 34,164 BTC in one week for $2.54 billion. In May, it added another 24,869 BTC for about $2.01 billion. By contrast, June’s weekly gains have been closer to $100 million each.

The slowdown also coincided with a small but significant 32 BTC sale in early June, worth about $2.5 million, to help cover dividend obligations.

Related: Bitcoin price down $64.5K week-to-date as strategy selling worries return

The selloff was small compared to the strategy’s overall bitcoin treasury, but it showed that cash obligations could still force limited BTC sales when STRC-led funding becomes less effective.

STRC-led weekly BTC purchase estimate. Source: STRC.LIVE

Analyst says STRC drop is a leverage wipeout.

According to Jesse Myers, head of bitcoin strategy at The Smarter Web Company, STRC’s selloff looked more like leverage than a distortion in the strategy’s fundamentals.

“The strategy is fine,” he said In a post on Thursday, the company added that STRC could pay dividends for 32 years if conditions remain unchanged, and indefinitely if bitcoin grows at a rate of about 2% per year.

STRC’s long period near $99–$100 encouraged investors to use heavy leverage, with some expecting the instrument to hold above $95. After the price dropped, margin calls and forced selling accelerated the decline.

According to analyst Scott Melker, the discount could also attract income buyers.

In a Sunday post, he noted that STRC’s profits are based on a liquidation preference of $100, not market value. At an 11.5% dividend rate, buyers at $90 earn about 12.8%, while buyers at $85 earn about 13.5%.

Source: x/ Scott Melker

At current prices, STRC offers an effective yield of around 13%. The strategy could announce its next dividend rate on June 30, while other options, including MSTR share issuance and cash reserves to fund bitcoin purchases, could be retained.