Wall Street broker Benchmark said bitcoins price pullback has revived the usual alarms about the survival of bitcoin tax firm Strategy (MSTR), concerns it dismisses as noise that emerges when the cryptocurrency falls.
In a report published Monday, analyst Mark Palmer argued that critics are mistaking short-term movements for genuine solvency risk, overlooking a balance sheet built to maximize bitcoin leverage.
With about 649,870 BTC ($55.8 billion) against $8.2 billion in ultra-low-cost convertibles and $7.6 billion in perpetual preferreds, Palmer said Strategy’s liabilities are manageable and its structure far more robust than critics claim.
Access to perpetual preferred, permanent capital with no refinancing cliff is a core competitive advantage that other digital asset treasury firms cannot match, the report said.
On the recurring question of distress levels, Benchmark said bitcoin would have to fall below around $12,700 and stay there, an 86% drop that it considers highly unlikely in today’s institutional-driven market.
Palmer reiterated his buy rating on the shares and $705 target, anchored to a 2026 bitcoin assumption of $225,000, and said the recent pullback does not change that view.
Shares were 4.7% lower in early trading, at $168.82. Bitcoin was 6% lower at press time, around $86,000.
With the digital asset treasury (DAT) sector navigating volatility, exchange-traded fund (ETF) flowchops and liquidity stress, the broker sees Strategy as the clear standout – scalable, yield-generating and structurally distributed – and said it expects the company to lead a recovery as liquidity and regulatory clarity improve.
The company announced the formation of a reserve of 1.44 billion dollars in dollars on Monday.
The reserve was funded through last week’s sale of common stock, and Strategy initially intends to keep enough money in the reserve to fund at least 12 months of dividends, according to a news release.
Read more: Strategy CEO: Equity and Debt Flexibility Power Long Term Bitcoin Accumulation Plan
