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Benchmark analyst Mark Palmer reiterated a buy rating and $705 price target on Strategy (MSTR) on April 30, defending the company's STRC preferred stock program against accusations that its Bitcoin accumulation model is circular or Ponzi-adjacent. The defense comes as gold advocate Peter Schiff and other critics have stepped up attacks on a financial structure that now sits at the center of the largest corporate Bitcoin treasury in the world.

Strategy launched STRC (Variable Rate Series A Perpetual Preferred Stock) in July 2025 and lists it on the Nasdaq at $100 par value. The instrument pays an 11.5% annualized dividend in monthly cash installments, a rate reached after seven consecutive increases from an initial 9%, with the most recent adjustment occurring in April 2026. Proceeds from STRC share sales are deployed almost entirely into Bitcoin purchases. In the capital stack, STRC sits senior to MSTR common equity but junior to corporate debt and the STRF preferred series, a hierarchy material to any investor assessing the instrument's relative risk. As of April 27, Strategy holds 818,334 BTC, worth roughly $63.7 billion at an average acquisition cost of approximately $75,527 per coin. That position represents about 3.9% of Bitcoin's total capped supply of 21 million coins, making Strategy the single largest corporate holder globally, surpassing BlackRock's iShares Bitcoin Trust earlier this month.

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The criticism and the counter

Schiff has publicly described Strategy's structure as "the largest Ponzi in the world," arguing the model depends on a continuous flow of new investor capital to pay existing holders. Bitcoin generates no operating revenue on its own, so dividends cannot come from the asset itself. Bloomberg columnist Matt Levine characterized the broader Strategy model in April 2025 as a perpetual motion machine: Bitcoin appreciation drives the stock price up, the company sells new shares at a premium to buy more Bitcoin, and that fresh capital funds both further accumulation and hundreds of millions in annual preferred dividends. When the inflows slow, critics argue, the machine stops. Schiff has further contended that the SEC has abdicated its responsibility by not pursuing enforcement action against the structure.

Palmer rejects that framing directly. "Not circular," he has stated of the STRC model, calling it "deliberate and durable" and a mechanism that converts "demand for yield into long-term bitcoin exposure." Strategy and Saylor, for their part, point to the SEC's continued processing of their filings without enforcement action as evidence of the structure's regulatory legitimacy. Palmer's rebuttal centers on a specific number: 2.05%. He contends that given the size of Strategy's Bitcoin treasury, a 2.05% annual price appreciation in Bitcoin is sufficient to generate enough value growth to cover the entire STRC dividend obligation, without depending purely on new capital raises. His framing positions STRC less as a circular dependency and more as a structured product that converts demand from fixed-income investors (a global market exceeding $3.5 trillion) into long-term Bitcoin exposure.

Strategy's internal performance metric, called BTC Yield, tracks Bitcoin per diluted share rather than traditional return on equity. Depending on the source and methodology, the company's BTC Yield for 2026 year-to-date has been reported in a range of 5.6% to 9.5%, against a full-year 2025 figure of 22.8%. The structure is designed to raise capital through preferred share issuance without diluting holders of MSTR common stock. For U.S.-based investors, STRC dividends are currently treated as a non-taxable return of capital under federal tax law, a meaningful differentiator relative to conventional preferred equity.

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The numbers are large and growing

STRC reached $8.5 billion in total size in under a year, which Michael Saylor has called the world's largest preferred stock. In the first three weeks of April alone, Strategy raised approximately $3.5 billion in new capital, with more than 85% coming from STRC issuance. The instrument drew a peak single-day trading volume of approximately $175.7 million, roughly three times its 30-day average, underscoring the depth of market interest. The company funded roughly 77,000 BTC in purchases during the first four months of 2026 through this channel. Total at-the-market capacity across its various programs is reported at approximately $42 billion, though that aggregate figure draws on multiple program disclosures and has not been independently confirmed against a single primary filing.

The downside is concrete. STRC carries a fixed annual dividend obligation of approximately $1.2 billion. If Bitcoin stagnates or falls sharply, Strategy must cover that obligation from cash reserves rather than appreciation, a meaningful constraint given its near-total commitment to holding rather than selling BTC.

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Regional implications: Africa and South Asia

For most users in high-adoption regions like Nigeria (ranked 6th globally in crypto adoption by Chainalysis in 2025), India, and Pakistan, STRC itself is out of reach. Accessing the instrument requires a Nasdaq brokerage account, USD exposure, and the ability to navigate capital controls that restrict foreign equity purchases in several of these markets. Crypto activity across Sub-Saharan Africa is largely P2P-driven, with stablecoins and Bitcoin used primarily for remittances and as a hedge against local currency instability. The $205 billion in on-chain value recorded for the region between July 2024 and June 2025, up 52% year-over-year, reflects grassroots use rather than structured-product investing.

The structural debate carries genuine regional weight, however. South Africa's Altvest Capital recently rebranded to Africa Bitcoin Corp and is targeting a $210 million Bitcoin treasury raise modeled explicitly on Strategy's approach. Listed on the Johannesburg Stock Exchange, with planned expansions to Namibia, Botswana, and Kenya, it faces the same structural dependencies as STRC but with a smaller capital base, thinner institutional liquidity, and less regulatory infrastructure to absorb stress.

In South Asia, local regulatory and tax conditions add further complexity. Indian retail investors face Securities and Exchange Board of India restrictions that limit direct access to foreign-listed equities. India also imposes a 30% flat tax on crypto gains and a 1% tax deducted at source on crypto transactions, compounding the friction for any participation in Bitcoin-linked instruments. Pakistan's government has held active discussions around establishing a national Bitcoin reserve, a development that could open a path toward domestic corporate treasury models similar to Strategy's. If Strategy's structure survives a full market cycle, the template could prove attractive to publicly listed South Asian companies seeking Bitcoin exposure within their own capital markets, making the outcome of the current stress test relevant far beyond North America.

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What comes next

Strategy's 818,334 BTC position and its widely reported target of accumulating 1 million BTC mean continued accumulation is likely regardless of how the debate resolves. The more consequential question is whether the 2.05% appreciation floor Palmer cites holds up across a full market cycle. Bitcoin fell more than 50% from its October 2025 all-time high before partially recovering, and that incomplete recovery constitutes a live test of Palmer's thesis: if Bitcoin revisits its bear-phase lows for an extended period, the question of how long Strategy can sustain $1.2 billion in annual dividends from appreciation alone becomes unavoidable rather than theoretical. If imitators across Africa and South Asia move forward with similar treasury structures, the outcome of this stress test will matter well beyond Strategy's own balance sheet.