Strategy’s Bitcoin Holdings Safe, Says Arca CIO

17-Nov-2025 TronWeekly

Peter Schiff says Strategy’s business model could collapse if investor demand weakens
Arca CIO Jeff Dorman rebuts claims about Strategy’s risk of forced Bitcoin liquidation
Dorman highlights positive cash flow and strong governance protecting Strategy’s treasury

Arca’s chief investment officer, Jeff Dorman, has pushed back against fresh concerns about Strategy’s financial stability. His comments came after high-profile critic Peter Schiff warned that Strategy could face bankruptcy if Bitcoin prices continue to fall.

Bitcoin Critic Question Strategy’s Stability

Dorman said the fears are not supported by the firm’s balance sheet or its debt structure. He dismissed claims that Michael Saylor’s firm could be forced to sell Bitcoin during the current market downturn.

I will never understand the fascination with Michael Saylor / $MSTR nor will I understand how people can confidently spout such stupid, inaccurate takes that are so easily disprovable.

It takes <5 minutes talking to any debt/equity expert to understand that he will never have to…
— Jeff Dorman (@jdorman81) November 16, 2025

Strategy has come under scrutiny as its stock price dropped over 33% this year. Also, Bitcoin recorded slight gains within the same period. Schiff argued that the company’s business model depends on income-focused investors who may stop buying its preferred shares.

MSTR’s business model relies on income-oriented funds buying its “high-yield” preferred shares. But those published yields will never actually be paid. Once fund managers realize this they’ll dump the preferreds & $MSTR won’t be able to issue any more, setting off a death spiral.
— Peter Schiff (@PeterSchiff) November 16, 2025

Hence, the company’s structure could enter a death spiral if investor demand fades. He also challenged Saylor to debate him at Binance Blockchain Week in Dubai.

Dorman disagreed, saying the claims are misleading. He argued that Strategy’s board and its debt terms help protect the company from any forced Bitcoin sales. He emphasized that none of the firm’s outstanding debt requires liquidation of Bitcoin to service interest or principal payments.

Also Read | Michael Saylor Predicts Bitcoin Will Outshine Gold’s Market Cap by 2035

Dorman Highlights Strategy’s Treasury Strength

The Arca executive also noted that companies rarely default just because a debt maturity is approaching. In many cases, lenders simply extend the terms in what is often called the “extend and pretend” strategy.

According to Dorman, the software business by Strategy is still producing positive cash flow. It is that cash that the company uses to maintain its Bitcoin treasury and reduce the chances of a liquidity crunch.

Strategy shares are listed at approximately 1.04x of its diluted market net asset value, per StrategyTracker. The share price is a little bit higher than the estimated equity value of its BTC holdings after factoring in any share dilution in the future.

Strategy is no longer a significant buyer of BTC as spot ETFs have taken the lead. Its Bitcoin treasury has become one of the biggest in the world. Hence, institutional and retail investors are paying close attention to its actions.

Also Read | Strategy Maintains BTC Position Despite $1 Billion Market Sell-Off Speculation

Also read: Bitcoin ETFs Face Major Outflows Amid Market Downturn

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