Strategy “Death Spiral” Concerns Denied: Cash Buffer and STRC Structure Seen as Key Defense Lines

Odaily Odaily reports that recent market concerns have been growing around Strategy (MSTR) potentially falling into a "death spiral sell-off," triggered by Bitcoin's price briefly dropping to around $60,000 and sparking discussions about the stability of its leveraged treasury model. However, Wall Street firms such as Benchmark and TD Cowen have released reports explicitly refuting this bearish narrative and maintaining a "Buy" rating on Strategy.

Benchmark analyst Mark Palmer stated that the "death spiral" hypothesis overlooks multiple buffer layers. Before any large-scale Bitcoin sale, the company would first need to deplete approximately $1 billion in cash reserves for dividend payments, while its current Bitcoin reserve of around $55 billion also provides a strong cushion. STRC is a class of perpetual preferred stock designed to maintain a price of approximately $100 and offer a floating annualized yield of around 11.5%. Analysis suggests that this mechanism forms a cycle of "yield demand → financing → BTC accumulation," positioning it as the core capital engine of Strategy's long-term treasury model.

TD Cowen further pointed out that even during significant Bitcoin pullbacks, the STRC structure has exhibited relatively low volatility, helping to stabilize the capital structure. It positioned the instrument as a "yield and capital preservation tool" rather than a purely high-risk speculative vehicle. However, there are also critical voices in the market suggesting that this structure could create a risk mechanism akin to a "negative feedback loop," potentially triggering asset sell-off pressure under extreme circumstances. (The Block)