Strategy "Death Spiral" Concerns Dismissed: Cash Buffer and STRC Structure Viewed as Key Defenses

Odaily Planet Daily News: Recent market concerns that Strategy (MSTR) might fall into a "death spiral sell-off" have been growing, sparked by Bitcoin's price temporarily dropping to around $60,000, leading to discussions about the stability of its leveraged treasury model. However, Wall Street firms such as Benchmark and TD Cowen have published reports clearly refuting this pessimistic narrative and maintaining a "Buy" rating on Strategy.

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

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