MicroStrategy’s Bitcoin Bet: Benchmark Defends Strategy Amid Stock Plunge
Despite a significant stock price decline in 2025, leading to speculation about a potential Bitcoin treasury sale, investment bank Benchmark has issued a strong defense of MicroStrategy’s corporate strategy. In a note to clients, analysts dismissed critics as “manifestly unfamiliar” with the company’s operational model and reiterated a “buy” rating with a $705 price target.
Understanding the Debt Structure and Bitcoin Threshold
Benchmark’s analysis directly addresses the primary fear surrounding MicroStrategy: the risk of a forced Bitcoin liquidation to cover its substantial debt. Equity Research Analyst Mark Palmer clarified the precise conditions required for such a scenario.
The $12,700 Bitcoin Price Floor
Palmer explained that MicroStrategy would only be unable to cover its approximately $8.2 billion in convertible debt if Bitcoin’s price fell below $12,700 and remained there. This represents an 86% decline from current levels. While acknowledging Bitcoin’s history of severe drawdowns, the analyst suggested that “multiple macro shocks” would need to occur simultaneously to trigger such a collapse today, deeming it a low-probability event.
MicroStrategy’s Position as a Premier Bitcoin Proxy
Benchmark’s bullish stance is rooted in MicroStrategy’s unique position within the cryptocurrency ecosystem. The firm has transformed from a business intelligence company into the world’s largest corporate Bitcoin treasury, holding 650,000 BTC worth over $55 billion.
A Leveraged Bet on Bitcoin’s Future
The investment thesis hinges on Bitcoin’s long-term appreciation. Benchmark’s $705 price target for MicroStrategy stock is predicated on Bitcoin reaching $225,000 by the end of 2026. Palmer described the stock as “one of the most powerful asymmetric vehicles in global markets,” citing its balance-sheet architecture and “Bitcoin-linked reflexivity” as unique advantages that provide unmatched upside potential for equity investors.
Market Context and Corporate Moves
The defense comes during a challenging period for both MicroStrategy and Bitcoin. MicroStrategy’s stock (MSTR) is down 43% year-to-date, closing recently at $171.24. Bitcoin itself has retreated more than 30% from its October 2025 record high of $126,080, currently trading around $85,700, and is down approximately 9% for the year.
Preparing for Volatility with a Dollar Reserve
In a related development, MicroStrategy announced the formation of a $1.44 billion U.S. dollar reserve. This fund is designed to provide “very smooth continuous dividends” during periods when Bitcoin’s price is depressed. Notably, the company did not rule out the possibility of selling Bitcoin, a statement that initially fueled market anxiety but is framed by Benchmark as a prudent risk management measure rather than a sign of distress.
The ongoing debate highlights the complex relationship between corporate finance and cryptocurrency strategy, positioning MicroStrategy as a critical case study for institutional Bitcoin adoption.
