Strategy Still the Premier Bitcoin Proxy, Benchmark Says, Rejecting ‘Doom’ Narrative

Core Viewpoint - The recent pullback in bitcoin's price has raised concerns about the solvency of bitcoin treasury company Strategy (MSTR), which the company dismisses as noise, arguing that its balance sheet is designed to maximize bitcoin leverage [1][3]. Financial Position - Strategy holds approximately 649,870 BTC valued at $55.8 billion, with obligations of $8.2 billion in ultra-low-cost convertibles and $7.6 billion in perpetual preferreds, indicating manageable obligations and a robust structure [2]. - The access to perpetual preferreds provides a competitive edge, as it represents permanent capital without refinancing risks, unlike other digital-asset treasury firms [2]. Market Outlook - Benchmark suggests that bitcoin would need to fall below approximately $12,700 and remain there for distress levels to be a concern, which is viewed as highly unlikely in the current institution-driven market [3]. - The analyst maintains a buy rating on Strategy shares with a target price of $705, based on a 2026 bitcoin price assumption of $225,000, asserting that the recent price pullback does not change this outlook [3]. Company Developments - The digital asset treasury sector is experiencing volatility, but Strategy is seen as a standout due to its scalable and yield-generating structure, expected to lead a rebound as liquidity and regulatory clarity improve [4]. - Strategy announced the formation of a $1.44 billion U.S. dollar reserve, funded through recent common stock sales, intended to cover at least 12 months of dividends [5].