Wall Street broker Benchmark said bitcoin The price pullback has reignited the usual alarms about the survival of bitcoin treasury Strategy (MSTR), concerns it dismisses as noise that arises every time the cryptocurrency falls.
In a report published Monday, analyst Mark Palmer argued that critics are confusing short-term moves with genuine solvency risk, overlooking a balance sheet built to maximize bitcoin’s leverage.
With approximately 649,870 BTC ($55.8 billion), versus $8.2 billion in ultra-low-cost convertibles and $7.6 billion in perpetual preferences, Palmer said Strategy’s liabilities are manageable and its structure much more solid than its detractors claim.
Access to perpetual preferences, permanent capital without a refinancing cliff, is a fundamental competitive advantage that other digital asset treasury companies cannot match, according to the report.
On the recurring question of stress levels, Benchmark said bitcoin would have to fall below about $12,700 and stay there, an 86% drop it considers highly unlikely in the current institution-driven market.
Palmer reiterated his buy rating on the stock and $705 target, anchored to a bitcoin assumption of $225,000 by 2026, and said the recent pullback doesn’t alter that view.
Shares fell 4.7% in early trading to $168.82. Bitcoin was 6% lower at press time, around $86,000.
With the digital asset treasury (DAT) sector going through volatility, declining exchange-traded fund (ETF) flow and liquidity stress, the broker sees the strategy as a standout (scalable, yield-generating and structurally advantageous) and said it expects the company to lead a rally as liquidity and regulatory clarity improve.
The company announced on Monday the formation of a reserve of 1.44 billion US dollars.
The reserve was funded through sales of common stock last week, 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 Drive Long-Term Bitcoin Accumulation Plan
