O Bitcoin voltou a subir, mas a Strategy pode ficar fora da festa

The Canadian bank TD Cowen recently released new price targets for Bitcoin: $280,000 in 2029 and $109,000 this year. However, the bank also criticized Bitcoin's main advocate, Michael Saylor, the founder and CEO of Strategy, the world's largest Bitcoin treasury company. Analysts Lance Vitanza and Jonnathan Navarrete from TD Cowen believe that Strategy will not capture the entire new cycle of Bitcoin's rally.

While they project Bitcoin to reach $109,000 by the end of the year, a 25% increase from today's $87.2, they kept Strategy's price target at $260. The reason behind this is the financial engineering that turned Strategy, originally a software company, into one of the largest corporate holders of Bitcoin. To finance its Bitcoin purchases, Strategy issued convertible bonds with interest rates ranging from 0% to 2.25% per year.

Currently, there are $6.7 billion worth of these convertible bonds in circulation. Many investors, mainly volatility arbitrageurs, bought these convertible bonds and sold MSTR stock at the underlying price. Another advantage was that during the bull market, the stock traded at two to three times the Bitcoin's cash value, known as NAV.

Saylor sold each share for $2 or $3, backed by $1 of Bitcoin, increasing the crypto asset per investor's holdings. This strategy, dubbed BTC Yield, was copied by over a hundred companies, including Méliuz (CASH3) and OranjeBTC (OBTC3) in Brazil. In 2025, however, Saylor added another layer to the strategy: the preferred stocks STRK, STRF, STRD, STRC, and STRE, with dividends ranging from 8% to 12% per year.

The formula worked well while Bitcoin climbed from $75,000 in April to over $110,000 in July. But after nearly a year of a bear market, the accounts tightened. In June, the market value fell to 0.63 times the NAV, making new issuances dilutive. Strategy's software business did not generate positive operating cash flow in 2025. In May this year, the company sold 32 BTC to pay dividends, and since August, it has been issuing common stock (MSTR) to repurchase its preferred stocks (STRC) that pay 12% per year.

The buyback of STRC is already at its price. For Strategy's accounts, BTC Yield (the amount of Bitcoins per share) is at -3.7% in 2026, compared to +22% in 2025. In practice, the company is diluting its shareholders to keep the STRC stable at a price of $100 per share. Ironically, Saylor is currently acting like a central banker in trying to maintain parity of STRC.

For Guilherme Bandeira from Solidus Wealth, a Bitcoin consultancy, the biggest risk lies in the STRC. "This risk tends to materialize mainly in scenarios of a sharp drop in Bitcoin, like the one that occurred at the end of June when investor confidence decreased and the STRC was pressured below par," he said. According to Brazil Journal, the dividends of preferred stocks cost $1.59 billion per year, consuming part of the stock price upside.

However, the target of $260 still represents a 71% increase from $152 on Friday. Today, Strategy announced the repurchase of $192 million in STRCs, as well as 250 Bitcoins, through the issuance of common shares, causing further dilution. However, betting against Saylor requires caution. It wouldn't be the first time he managed to come out bigger from a bear market.

In March 2000, MicroStrategy's stock valued at $333, from an IPO in 1998, had dropped to $6. After some audits questioning the accounting and balance sheets were revised, the stock reached $0.42 in July 2002, a 99.9% decline. The comeback began in August 2020 when Saylor allocated $250 million from cash to Bitcoin. The bet led MSTR to $543 in November 2024, in comparable terms.