Benchmark Defends Strategy’s Bitcoin Playbook as Shares Drop, Says Forced Sales Unlikely

Investors are testing Strategy’s resolve, but Benchmark argues the operating model is intact. The bank reiterated a Buy rating and a $705 target, positioning the stock as a high-torque proxy on Bitcoin despite a sharp drawdown in 2025.

Benchmark’s core point: critics are misreading Strategy’s mechanics. The firm estimates Bitcoin would need to fall and remain below $12,700 for Strategy to struggle to fully cover roughly $8.2 billion of convertible debt—an ~86% drop from current levels. Such drawdowns have happened in Bitcoin’s history, but Benchmark suggests it would take several macro shocks in concert to push price action that far. Their target assumes Bitcoin reaches $225,000 by year-end 2026, and they frame Strategy’s equity as uniquely asymmetric due to its balance sheet design, capital-raising playbook, and the reflexive link to BTC.

Here’s the piece that actually matters now: Strategy is adding a $1.44 billion U.S. dollar reserve to deliver “very smooth” ongoing dividends when Bitcoin is weak—and it is no longer ruling out BTC sales. That optionality is a subtle regime change. For years, the flywheel ran on accumulation, leverage, and investor belief that equity issuance or converts would fund more BTC on strength. Introducing a cash buffer and potential sales creates a financial circuit breaker that can stabilize near-term obligations and dividend continuity, but it may also mute the upside reflexivity that historically supercharged the stock on rallies. In other words, the company is trading a bit of upside convexity for balance-sheet durability.

Two numbers anchor the debate. First, holdings: 650,000 BTC acquired for $48.3 billion, worth about $55.2 billion at today’s prices. Second, market stress: MSTR closed at $171.24 on Monday, down 43% year-to-date as Bitcoin retraced its 2025 gains. BTC trades near $85,779—more than 30% off October’s $126,080 high per CoinGecko—and is down about 9% YTD even with friendlier U.S. policy under President Donald Trump. Prediction markets reflect the tug of war: 54% of Myriad respondents see the next big move to $100,000, the rest to $69,000.

From a portfolio construction lens, Strategy still offers leveraged exposure to BTC via common stock and newly created dividend instruments. But the company’s commitment to a smoother payout and willingness to sell if needed changes investor psychology. Yield-oriented holders may gain confidence; momentum-driven holders might mark down the equity’s “pure play” beta. That tension is the story to watch, not just the arithmetic of a $12,700 stress threshold.

Benchmark may be right that a forced unwind is remote at today’s prices. The more immediate variable is how the new reserve policy and optional BTC sales reshape the reflexive loop between Bitcoin, capital markets access, and the stock’s torque. If management executes the shift without blunting upside too much, Strategy keeps its drawdown defense and its asymmetric appeal.