Benchmark and TD Cowen Reject Strategy Death Spiral Concerns, Maintain Buy Ratings

Wall Street firms Benchmark and TD Cowen have pushed back against market concerns that Strategy (MSTR) could face a “death spiral” sell-off tied to its leveraged treasury model after Bitcoin briefly fell to around $60,000. According to Odaily, both firms issued reports rejecting the bearish narrative and maintained “buy” ratings on Strategy.

Benchmark analyst Mark Palmer said the “death spiral” thesis overlooks multiple buffers. He said the company would need to use about $1 billion in cash reserves for dividend payments before any large-scale Bitcoin sales, and that its roughly $55 billion Bitcoin holdings provide additional cushioning.

Palmer described STRC as a type of perpetual preferred stock designed to maintain a price near $100 and offer an approximately 11.5% floating annualized yield. The analysis said the structure creates a cycle of “yield demand → financing → increased Bitcoin holdings,” which it characterized as a core funding engine for Strategy’s long-term treasury model.

TD Cowen said that even during sharp Bitcoin pullbacks, the STRC structure has shown relatively low volatility, which it said can help stabilize the company’s capital structure. TD Cowen described STRC as a “yield and capital protection tool” rather than a purely high-risk speculative instrument.

The report also noted that critics argue the structure could create a “negative feedback loop” that, under extreme conditions, might trigger selling pressure on assets.