Dorman Counters Claims That Saylor’s Strategy Faces BTC Liquidation Risk

• Strategy’s Bitcoin leverage faces scrutiny as Schiff warns of structural and yield risks.
• Dorman counters, citing Strategy’s governance, cash flow support, and flexible debt.
• Strategy’s stock dip tracks Bitcoin’s drop, raising concerns over its leveraged exposure.

A new dispute over Strategy’s Bitcoin exposure intensified Sunday after sharp market losses pushed scrutiny onto the firm’s leveraged approach, prompting Arca CIO Jeff Dorman to dispute claims that Michael Saylor could face forced liquidation. The exchange saw critics raise questions about Strategy’s debt structure and its resilience. 

Schiff’s Warnings and Strategy’s Debt Structure

Peter Schiff, a known Bitcoin critic, questioned the stability of Strategy’s preferred-share model on X. He argued that the structure depends on income-seeking buyers and warned that published yields may not materialize if demand weakens. He said the setup could fall into a “death spiral” during extended market stress.

Schiff also said he believes Strategy may face bankruptcy risk and challenged Saylor to debate him at Binance Blockchain Week in Dubai in early December. His invitation attempted to create a public confrontation over Strategy’s approach and its dependence on Bitcoin accumulation. 

Dorman Opposes the Claims 

However, Dorman countered the concerns and said they misrepresent Strategy’s actual risk profile. He noted that Saylor’s 42% ownership makes an activist takeover extremely unlikely. He also said that none of Strategy’s debts include covenants that could force the firm to liquidate Bitcoin.

Dorman pointed to the firm’s legacy software business, which he said still produces positive cash flow that supports interest expenses. That point introduced a different angle, noting internal cash generation rather than Bitcoin-linked returns. He also said borrowers rarely default solely due to debt maturities, adding that lenders often extend terms in what he described as an “extend and pretend” practice.

He further argued that Strategy no longer operates as a major marginal buyer of Bitcoin, especially compared with ETFs. However, he said that reduced influence does not make the firm a systemic threat to bitcoin markets. His remarks directly addressed broader fears spreading among critics.

Strategy Stock Performance Shows Market Stress 

The price of Bitcoin started declining after reaching a high near $126K and now trades below $100K. Strategy’s stock tracked the pressure, extending losses through November.

The company’s diluted market net asset value multiple dipped below 1 early in November before rebounding to about 1.21. The figure is still far below levels investors normally consider healthy for a treasury-style firm. Strategy’s shares have dropped more than 50% since July and trade near $199.

This move contrasts with gold, which held its $4,000 support level after a brief dip. Gold trades at $4,085 per ounce after pulling back from October’s record near $4,380. These moves show differing reactions between traditional safe-haven assets and digital markets.

Related: ‘How Low Until You Admit I Was Right?’—Schiff Mocks Bitcoiners

Saylor Maintains Confidence 

Saylor said Bitcoin has now reached a market floor after months of liquidation pressures. He said forced selling from leveraged positions has mostly cleared, reducing strain on broader markets. His comments aimed to put volatility in context following several fast corrections.

He also reiterated Strategy’s long-term Bitcoin accumulation plan, first launched in 2020. Saylor said the firm would not face balance-sheet problems unless Bitcoin fell more than 90%, a drop he described as unlikely. His view aligned with Dorman’s comments, which emphasized that core fundamentals remain intact.

Dorman’s remarks offered a counter to Schiff’s warnings by stressing governance strength, cash flow, and debt terms. However, Schiff’s criticisms continued to draw attention as Strategy’s stock traded sharply lower. The exchange now shows broader tensions around leveraged corporate Bitcoin holdings during increased volatility.