Analyst: Strategy Still Far from Forced Liquidation, Comparing STRC Depeg to UST Event is Overreaction

Odaily reported that crypto analyst Murphy stated that Strategy currently does not face a preferred stock solvency crisis. He believes that to breach Strategy’s preferred stock tier, Bitcoin would need to drop to $26,000; to breach the debt tier, it would need to fall to $8,000.

Murphy noted that the similar product SATA remained above $99 this week, while STRC experienced a depeg, indicating that the current market selling pressure is more targeted at Strategy itself rather than being a product design flaw. He views this more as a repricing of leverage and credit, alongside a liquidity contraction triggered by cash reserve depletion and amplified signals from the first-ever sale of Bitcoin, rather than a liquidation crisis.

Murphy stated that Strategy is still a long way from forced liquidation; however, at the current price level, its ‘flywheel model’ has temporarily stalled. The subsequent price trend of Bitcoin will determine whether this is a mid-cycle adjustment or the beginning of deeper risks. He believes that comparing the STRC depeg to the UST depeg and LUNA collapse of the previous cycle is a clear overreaction. If Bitcoin prices recover and equity ATM financing resumes, Strategy could restore its cash reserves and restart its capital operation model.