According to the institution, the concerns circulating in the market are merely the “noise” that occurs every cycle when Bitcoin declines, and the company’s financial fundamentals remain solid.
In a report released Monday, analyst Mark Palmer warned against critics portraying short-term volatility as a genuine risk of bankruptcy for the company. He said these comments ignore Strategy’s balance sheet model, which is designed to maximize Bitcoin’s leverage.
The company holds approximately 649,870 BTC, worth $55.8 billion at the time of writing. This position is supported by $8.2 billion in ultra-low-cost convertible notes and $7.6 billion in perpetual preferred stock.
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Benchmark argued that this structure keeps Strategy’s total debt manageable and that the company has a much stronger corporate foundation than critics claim. The report noted that Strategy’s perpetual preferred stock structure, in particular, is a key competitive advantage that distinguishes it from other digital asset holding companies.
Benchmark also addressed the frequently discussed “crisis threshold” in the market, stating that for a real financial risk to emerge, the Bitcoin price would need to fall to around $12,700 and remain at that level for an extended period. It stated that this scenario is extremely unlikely, as it would imply an 86% collapse given the current institutional investor-dominated market structure.
*This is not investment advice.
Continue Reading: Is Strategy’s Bankruptcy a Possibility? Wall Street Brokerage Firm Reveals “The Level to Fear” for Bitcoin
