Benchmark analyst: 183% boom for Strategy stock despite BTC sell-off pressure
The odds of Strategy selling part of its BTC holdings by 2026 were about 28%.
Strategy stock (Nasdaq:MSTR) showed mixed results on the 2nd of December. This followed confirmation that the firm would sell its Bitcoin holdings if the mNAV (market-to-net-asset-value) drops below 1x.
The stock dipped over 8% to a low of $149 before rebounding and closing the Monday session at $171.5.
However, analysts at investment bank and research firm Benchmark raised MSTR’s price target to $705, implying a 183% upside potential.
In a note to clients, Benchmark’s equity Research Analyst Mark Palmer downplayed the MSTR fears, especially those linked to BTC drawdown and $8.2 billion debt obligations.
He added,
“In simple terms, the company would be unable to fully cover its ~$8.2bn of convertible debt outstanding if Bitcoin’s price were to fall below $12,700 and stay there.”
That would mean an 86% BTC price crash to cripple MSTR, but Palmer said such an outcome was highly unlikely.
“While drawdowns of 80%+ have occurred multiple times during Bitcoin’s 17-year history, we believe multiple macro shocks would have to happen simultaneously to drive such a reversal at this point.”
In December, only Benchmark issued a strong buy for MSTR, despite the MSCI exclusion threat and the BTC correction. Thirteen other analysts also gave a ‘moderate buy’ rating.
According to Palmer, the stock has a “Bitcoin-linked reflexivity gives it upside torque that no other equity can match.”
Impact of Strategy’s $1.44B reserve
Strategy also announced a $1.44 billion reserve to cover obligations linked to dividends from preferred stocks it uses to raise capital for BTC purchases.
Some hailed the reserve as a cushion for the firm to avoid selling its BTC to cover the obligations. However, since the reserve itself was another loan, others feared that the entire MSTR ecosystem could collapse soon.
For critics, such a scenario could drag BTC and the entire crypto market with it. In fact, Peter Schiff called it the “end of MSTR.”
Will Strategy sell its BTC holdings?
However, CryptoQuant analyst Carmelo Aleman disagreed with Schiff’s doomsday outlook.
He highlighted that the current MSTR level was undervalued (tagging lower MSTR price bands) relative to its BTC reserves, a signal that triggered a rebound in 2022.
Market focus will now shift to MSTR mNAV (currently at 1.15x) and whether the firm sells its 650K BTC.
On the prediction site Polymarket, the odds of Strategy’s BTC sell-off by mid-2026 jumped to over 40% before easing below 30% at press time. Put differently, the chance for the same was low but not zero.
Final Thoughts
- Despite market jitters, Benchmark foresees a 180% upside potential for MSTR stock, and 13 analysts are bullish on the stock.
- The market began pricing the possibility that Strategy may sell BTC in 2026.
