TD Cowen "Strategy strengthens crypto downturn resilience by bolstering cash"

Investment bank TD Cowen said the recent dollar liquidity increase by Bitcoin (BTC) treasury company Strategy is a measure that strengthens financial stability even in a prolonged digital-asset (cryptocurrency) downturn.

On the 23rd (local time), The Block reported that TD Cowen said in a report, "Strategy raised about $748 million through a common-stock sale, expanding its cash holdings to $2.19 billion," and "this is at a level that can cover about 32 months of financial obligations including interest expenses and preferred-stock dividend payments, significantly increasing its defense against short-term market volatility."

TD Cowen said, "Proactively strengthening liquidity in market stress periods is a reasonable choice. This move is a signal that alleviates concerns about the company's survival even in a long-term 'crypto winter' scenario." It particularly noted that a dual-treasury structure holding both dollars and bitcoin reduces the likelihood of forced bitcoin sales, which can contribute to market stability in the mid- to long term.

TD Cowen maintained its 'Buy' rating on Strategy and set a 12-month target price of $500. The report explained that given Strategy's high sensitivity to Bitcoin price movements and the large volatility of both Bitcoin price and the stock premium, the target price falls within a realistic range over a one-year time horizon.