Strategy, formerly known as MicroStrategy, is now facing severe scrutiny and criticism from Wall Street professionals for its strategy of accumulating Bitcoin with unlimited leverage.
Jeff Dorman, chief investment officer of Arca, a well-known cryptocurrency asset management company, publicly warned that Strategy's capital structure, which relies on the issuance of a large amount of preferred stock, is now facing a crisis of "going out of control".
Arca, burdened with an annual dividend of $1.5 billion, criticizes the "structure as out of control."
Jeff Dorman posted on the social media platform X, pointing out that Strategy's capital structure is entirely based on an extremely optimistic assumption—that "Bitcoin is about to surge (Moon)"—and uses this to support its future dividend payment obligations.
Data shows that Strategy has issued five different risk levels of preferred stock (ticker symbols STRK, STRF, SRD, STRC, and STRE), with a total issuance size of $15 billion . This means the company must generate approximately $1.5 billion in cash annually to pay its substantial dividends. Dorman expressed "confusion" about Strategy's recent decision to repurchase bonds maturing in 2029, believing it does little to alleviate the heavy dividend burden imposed by the preferred stock.
He pointed out sternly that if the price of Bitcoin continues to fluctuate or fall, Strategy will ultimately be left with only two extreme and fatal choices:
- Sell Bitcoin to pay preferred stock dividends .
- The company announced it would cease paying dividends .
Dorman warned that whichever path the company chooses, it will have a huge, asymmetrical negative impact on its stock price, investor confidence, and even the entire Bitcoin market.
The CEO admitted to the possibility of selling cryptocurrency; 840,000 BTC are currently showing a paper loss.
In response to market skepticism, Strategy CEO Phong Le, in an interview with CNBC, did not deny the possibility of a sell-off. He confirmed for the first time that the company "is likely to sell Bitcoin at some point in the future," but also emphasized that the company's overall strategy remains to "net increase" its total Bitcoin holdings and continue to increase the amount of Bitcoin implied per share. This statement echoes previous hints from Executive Chairman Michael Saylor regarding room for compromise.
However, the market is clearly concerned about its financial resilience. On the prediction market Polymarket , betting odds on whether Strategy will sell Bitcoin in 2026 have recently surged.
- Sold before May 31, 2026: Approximately 18%
- Sold before June 30, 2026: Approximately 71%
- Sold before December 31, 2026: Up to 90%
What's even more alarming for investors is Strategy's current book profit and loss. As of the time of this report, Strategy holds a staggering 843,738 BTC (of which approximately 170,000 were purchased this year), with a total purchase cost of approximately $63.87 billion, averaging a staggering $75,700 per BTC .
However, Bitcoin prices have been weak recently, currently trading at around $73,737 (down about 16% year-to-date). This means that the world's largest Bitcoin holder is currently facing an overall paper loss. The immense interest burden and paper losses raise the question of whether Strategy's Bitcoin faith will be shattered by the reality of its financial statements, making this one of the biggest unexploded ordnance in the crypto in the second half of 2026.
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