Recent market debate has centered on concerns that Strategy (MSTR) could enter a so-called “death spiral” of selling. The discussion intensified after Bitcoin briefly fell back to around $60,000, prompting renewed scrutiny of the stability of Strategy’s leveraged treasury model and the way its capital structure could respond during a sharp decline in Bitcoin prices.
Benchmark Points to Multiple Layers of Buffer
According to Odaily, citing The Block, Wall Street firms including Benchmark and TD Cowen have issued reports directly rejecting the pessimistic narrative around Strategy. Both firms maintained their buy ratings on the company. Benchmark analyst Mark Palmer said the “death spiral” thesis overlooks several layers of protection, including the company’s cash position, the scale of its Bitcoin reserves and its financing structure.
Palmer noted that before any large-scale Bitcoin sale, Strategy would first need to use roughly $1 billion in cash reserves for dividend payments. He also highlighted that the company’s current Bitcoin reserve, valued at about $55 billion, provides a substantial buffer. In Benchmark’s view, the idea that Strategy would move immediately into forced Bitcoin selling oversimplifies the sequence of pressures the company would face.
STRC Framed as a Core Funding Engine
The reports also focused on STRC as an important part of Strategy’s treasury framework. STRC is a type of perpetual preferred stock designed to maintain a price of around $100 while offering a floating annualized yield of about 11.5%. The analysis described the mechanism as a loop of “yield demand → financing → BTC accumulation,” and characterized it as a core funding engine for Strategy’s long-term treasury model.
TD Cowen said the STRC structure continued to show relatively low volatility even during a major Bitcoin pullback, helping stabilize the company’s capital structure. The firm positioned STRC as a “yield and capital protection tool,” rather than simply a high-risk speculative product. At the same time, criticism remains in the market: some argue that the structure could create a risk mechanism similar to a “negative feedback loop” under extreme conditions, increasing pressure for asset sales.