Key Takeaways
- Strategy plans to acquire 6,720 BTC via euro-denominated STRE preferred stock.
- TD Cowen maintains a $141K bitcoin year-end base-case scenario.
- Preferred securities offer strong income, appreciation potential, and high BTC coverage.
- Strategy continues aggressive bitcoin accumulation, aiming for ~815,000 BTC by 2027.
TD Cowen projects that Strategy will add 6,720 BTC to its corporate treasury following the company’s €620 million ($715 million) issuance of its first euro-denominated preferred stock, STRE. Analysts Lance Vitanza and Jonnathan Navarrete note that this marks Strategy’s entry into euro-based bitcoin-backed credit markets, opening a new funding channel for its BTC treasury strategy.
With net proceeds of €608.8 million expected, TD Cowen estimates that “substantially all” of the funds will be deployed to acquire bitcoin at an average price of $104,500, roughly in line with current BTC market levels. Factoring in future common-share issuance to fund STRE dividends, the firm projects a net gain of 4,235 BTC.
Preferred Stock Issuance Drives BTC Accumulation
Strategy’s use of preferred securities, including the new STRE shares and the resumed variable-rate STRC at-the-market program, continues to fuel its bitcoin-per-share growth. Last week, $26.2 million of STRC issuance exceeded combined proceeds from other preferred classes, helping fund more than half of a $50 million bitcoin purchase announced by Strategy.
TD Cowen highlights that preferred securities offer both income and price appreciation potential, with lower volatility than common shares, spot bitcoin, or BTC ETPs. Coverage ratios remain robust, with STRE shares at 5.2x BTC backing and STRC at 5.5x. Analysts maintain buy ratings across Strategy’s existing STRF, STRK, and STRD preferred shares.
TD Cowen Maintains $141K Bitcoin Base-Case
Looking beyond corporate acquisitions, TD Cowen reaffirmed its year-end bitcoin outlook: a base-case of $141,277, an upside of $160,000, and a downside of $60,000. The base-case scenario assumes roughly $4 billion in quarterly BTC acquisitions by Strategy, while the upside anticipates more than $4.5 billion. The bear case presumes acquisition halts due to market disruptions or restricted access to capital markets.
Also Read: Bitcoin Bulls Beware: Are $100K Levels at Risk?
TD Cowen also set a $535 price target for Strategy’s common stock, implying a 124% upside from current levels, based on its projected intrinsic bitcoin value per share by December 2027. By then, the firm expects Strategy to hold approximately 815,000 BTC.
