Benchmark Defends Strategy as Strongest Bitcoin Proxy, Dismissing Solvency Fears

Wall Street broker Benchmark says concerns over the solvency of bitcoin treasury company Strategy (MSTR) are misplaced, describing the stock as the “strongest asymmetric bet on bitcoin.”

In a report published Monday, analyst Mark Palmer argued that critics are mistaking short-term bitcoin price swings for genuine solvency risk, overlooking Strategy’s balance sheet, which is designed to maximize bitcoin leverage. The company holds approximately 649,870 BTC, valued at $55.8 billion, alongside $8.2 billion in ultra-low-cost convertibles and $7.6 billion in perpetual preferreds, making its obligations manageable, Palmer said.

Benchmark highlighted the competitive advantage of Strategy’s perpetual preferreds—permanent capital with no refinancing cliff—which other digital-asset-treasury firms cannot replicate. On the question of distress, the broker noted that bitcoin would need to fall below roughly $12,700 and remain there—an 86% drop—for Strategy to face serious solvency issues, a scenario it deems highly unlikely in the current institution-driven market.

Palmer reiterated his buy rating on MSTR with a $705 target, anchored to a 2026 bitcoin assumption of $225,000, emphasizing that the recent pullback in bitcoin prices does not alter that outlook. At publication, shares were down 4.7% at $168.82, while bitcoin was down 6% to around $86,000.

Amid ongoing volatility in the digital asset treasury (DAT) sector—including ETF flow fluctuations and liquidity stress—Benchmark sees Strategy as a clear standout: scalable, yield-generating, and structurally advantaged. The broker expects the company to lead a rebound as liquidity and regulatory clarity improve.

On Monday, Strategy also announced the formation of a $1.44 billion U.S. dollar reserve, funded through last week’s common stock sales. The company intends to maintain enough funds in the reserve to cover at least 12 months of dividends, with plans to expand over time.