Arca CIO Jeff Dorman Hits Back at Critics of Saylor’s BTC Strategy

Strategy’s leveraged bitcoin approach came under fresh scrutiny Sunday as critics questioned whether Michael Saylor’s firm can withstand prolonged market stress.

Among the most vocal was longtime Bitcoin detractor Peter Schiff, who chairs Schiff Gold and serves as chief global strategist at Euro Pacific Asset Management.

In a series of posts on X, Schiff argued that Strategy’s model depends on income-focused buyers of its “high-yield” preferred shares, said the published yields “will never actually be paid” and warned the structure could enter a “death spiral” if demand weakens.

He also said he believes the company “will eventually go bankrupt” and challenged Saylor to debate him at Binance Blockchain Week in Dubai in early December. His invitations appeared designed, at least in part, to draw Saylor into a public confrontation over the firm’s approach to holding bitcoin.

Jeff Dorman, chief investment officer at digital asset management firm Arca, offered a markedly different view. In his own post on X, Dorman criticized what he called “stupid, inaccurate takes” about Strategy’s risk profile and said concerns that the company might be forced into selling bitcoin overlook the fundamentals of its balance sheet. Dorman did not reference Schiff directly, but his comments addressed the broader claims circulating among skeptics who argue Strategy could face severe pressure if bitcoin prices fall sharply.

Dorman said Saylor’s 42% ownership makes an activist takeover “almost impossible” and noted that none of Strategy’s debts include covenants that would compel the company to liquidate bitcoin. He added that the firm’s legacy software business still generates positive cash flow, helping support interest expenses he described as manageable. Borrowers also rarely default solely because a maturity approaches, he said, arguing that lenders often agree to extend terms in what he called a familiar “extend and pretend” dynamic.

Strategy’s stock has been under pressure despite its expanding bitcoin position. Class A shares closed at $199.74 on Friday, down 4.22% on the day and 33.42% year to date. Over the same period, bitcoin has returned about 0.4%.

According to StrategyTracker, which tracks corporate bitcoin treasuries, Strategy’s diluted market net asset value multiple stands near 1.06x, meaning the shares trade only modestly above a conservative estimate of their bitcoin-backed value after accounting for all potential future shares from options, warrants and convertible debt.

Dorman added that Strategy is no longer a meaningful marginal buyer of bitcoin relative to ETF inflows but said this does not make the company a systemic risk. “If you follow anyone saying MSTR is a risk to BTC, tell them to call me,” he wrote.

Bitcoin traded around $94,293 at 11 p.m. UTC, down 1.2% over the past 24 hours.