Summary
- Benchmark said Strategy’s Bitcoin (BTC) buying strategy is sustainable over the long term.
- It said the strategy channels funds raised through sales of perpetual preferred stock into Bitcoin investment.
- It added that dividend payments could be funded by selling part of its Bitcoin holdings if needed, and that structured institutional Bitcoin purchases could affect long-term supply and demand and price trends.
Forecast Trend Report by Period
Strategy’s Bitcoin buying strategy is sustainable over the long term, according to an analysis that pushed back against concerns about its preferred stock-based fundraising structure.
The Block reported on May 30 that Wall Street investment bank Benchmark views Strategy’s model of accumulating Bitcoin through sales of perpetual preferred stock as sustainable.
Benchmark analyst Mark Palmer said claims that the STRC structure is a Ponzi scheme reflect a misunderstanding of the company’s capital-raising model.
He described the strategy as a deliberate structure that channels demand for preferred-stock dividends into Bitcoin investment.
Palmer added that the company could sell part of its Bitcoin holdings to pay dividends if necessary.
Markets are watching how structured institutional Bitcoin purchases could affect long-term supply and demand. The durability of future fundraising and the direction of prices remain key variables.
JH Kim
reporter1@bloomingbit.ioHi, I'm a Bloomingbit reporter, bringing you the latest cryptocurrency news.
