Peter Schiff "STRC, siphons off Bitcoin demand"

▲ Strategy(MSTR), Bitcoin(BTC)/ChatGPT generated image

While Strategy (MSTR) stock price fell by over 3% in a single day, Peter Schiff, a Bitcoin (BTC) critic, claimed that Strategy's preferred stock STRC is siphoning off Bitcoin demand. Unlike the weak MSTR stock price, STRC recorded a trading volume of 5 million shares, marking its fourth largest trading volume ever.

CoinGape reported on May 14 (local time) that Strategy's stock closed at $178 on May 13, down 3.4%, and opened on Thursday at $176, 1% lower than the previous day. In contrast, STRC preferred stock showed strong trading volume during the same period. On May 14, 5 million shares of STRC were traded at over $100, a volume equivalent to buying 3,094 BTC. STRC's all-time high trading volume was 14.7 million shares recorded on April 14.

Schiff argued that STRC's high-yield structure could weaken direct Bitcoin buying demand. He pointed out that investors are flocking to STRC, which offers an annual return of 11.5%, rather than Bitcoin, which does not guarantee profits until the price rises. According to the article, Bitcoin has fallen by 2% in the last 7 days, and MSTR stock price has also decreased by 3%.

Schiff raised concerns that while Strategy is buying Bitcoin with funds secured by selling STRC, it has to pay an annual 11.5% in return. He had previously criticized STRC as a clear Ponzi scheme and reiterated his existing argument that funding Bitcoin purchases and then paying out returns is unsustainable.

However, STRC continues to set trading volume records, regardless of Schiff's criticism. After raising an additional $240 million on Tuesday to buy Bitcoin, STRC also saw 69,000 shares traded in pre-market trading on May 14, showing its largest pre-market surge ever. CoinGape noted that STRC's high trading volume could be a positive factor for MSTR stock price, as it can increase Strategy's capacity to buy Bitcoin.

On the other hand, warning signs appeared on the MSTR stock price chart. The stock price broke below the lower trend line of the rising channel that started at $154 on April 17 and rose to $197 on May 11, and an analysis suggested it could fall to $170 if selling pressure continues. The Relative Strength Index (RSI) dropped by 13 points from 69 on May 11 to 56 in three days, and the Awesome Oscillator (AO), while remaining in positive territory, showed red bars, indicating the possibility of further decline. CoinGape raised the possibility that the MSTR stock price uptrend, which ran from $119 on April 1 to $197 on May 11, might be coming to an end.

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