Despite recent turbulence in the cryptocurrency markets, TD Cowen has reaffirmed its confidence in Strategy’s Bitcoin acquisition model, asserting that the mechanism powering its Bitcoin purchases remains robust and undeterred. The investment bank maintained its $535 price target, citing strong investor interest in the company’s preferred shares and steady growth in Bitcoin holdings per share, even as the net asset value (NAV) premium experienced a contraction.
According to TD Cowen’s latest research note, Strategy has managed to continue accumulating Bitcoin aggressively. This progress comes even amid heightened market volatility and a dip in the implied premium of Bitcoin held by the treasury-focused firm. Analysts highlighted that the company’s ability to issue new shares—particularly its euro-denominated and variable-rate preferred shares—has been instrumental in fueling its ongoing Bitcoin acquisition.
“What caught our attention was the increase in variable-rate preferred share issuance during a period of sharp Bitcoin price declines,” wrote TD Cowen analysts. “This reinforces our view that Strategy remains a compelling entry point for investors aiming to gain exposure to Bitcoin through a structured investment vehicle.”
The report emphasized that investor demand for Strategy’s preferred shares has remained resilient. This demand has provided the company with fresh capital, enabling continued Bitcoin purchases at opportunistic price points. The issuance of euro-denominated preferred shares further diversified Strategy’s capital-raising capabilities, expanding its reach among international investors.
TD Cowen’s analysts believe that this continued share issuance during market downturns not only reflects investor confidence but also allows Strategy to capitalize on lower Bitcoin prices, effectively dollar-cost averaging into the asset. As a result, the company has been able to increase the average Bitcoin per share, enhancing long-term value for shareholders.
While the NAV premium—a measure of how much investors are willing to pay over the intrinsic value of the Bitcoin held—has narrowed, this is not seen as a red flag. Rather, TD Cowen views it as a temporary market reaction to broader volatility in digital assets. The report suggests that once market sentiment stabilizes, the premium could rebound, further benefiting investors already positioned in Strategy.
Additionally, the firm’s Bitcoin purchasing strategy appears to be well-calibrated to navigate unpredictable market cycles. By relying on multiple funding sources and maintaining consistent acquisition momentum, Strategy reduces its vulnerability to short-term market swings. This disciplined approach allows the company to maintain a long-term outlook, aligning with the investment horizon of many institutional holders.
TD Cowen also noted that Strategy’s capital structure—particularly its use of preferred shares instead of traditional debt—provides flexibility while minimizing financial risk. This model ensures that the company can raise funds without compromising its balance sheet or overleveraging, a crucial advantage in a volatile crypto market.
Another key point of the report is Strategy’s role as a semi-passive Bitcoin investment vehicle. For investors who prefer not to directly manage digital wallets or handle private keys, Strategy offers a regulated, transparent, and liquid exposure to Bitcoin. This is increasingly appealing to institutional and retail investors seeking safer entry points into the crypto ecosystem.
Looking forward, TD Cowen expects Strategy to remain active in the market, especially if Bitcoin’s price continues to fluctuate. The firm’s capacity to scale up its acquisition model under varying conditions positions it advantageously for future growth. Should Bitcoin experience another rally, Strategy’s accumulated holdings could yield substantial returns, magnifying its value proposition.
Moreover, Strategy’s success highlights a broader trend in the financial sector: the institutionalization of Bitcoin investment vehicles. As more firms adopt similar models, the landscape for crypto-related securities is likely to become increasingly sophisticated. Investors will have more options to gain exposure to digital assets without the technical hurdles historically associated with them.
In conclusion, TD Cowen’s reaffirmation of Strategy’s operational integrity and growth potential underscores a broader confidence in Bitcoin’s long-term value. Amid short-term volatility, Strategy’s ability to attract capital, scale its holdings, and maintain structural resilience makes it a standout choice for investors seeking a reliable on-ramp to Bitcoin exposure.