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Michael Saylor’s Strategy’s (MSTR) big Q4 loss looks dramatic, but bitcoin would have to fall below $8K to trigger trouble

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Michael Saylor's Strategy’s (MSTR) big Q4 loss looks dramatic, but bitcoin would have to fall below $8K to trigger trouble

Wall Street analysts covering Strategy (MSTR) broadly agree on one point after the company’s fourth-quarter earnings on Thursday: the headline losses look dramatic, but they do not signal a liquidity crisis or forced bitcoin selling.

Strategy reported a $17.4 billion operating loss and a $12.6 billion net loss for the quarter, figures driven largely by non-cash mark-to-market accounting tied to bitcoin’s price decline. Both TD Cowen and Benchmark said the market reaction missed that context, sending shares down about 17% on a day when bitcoin and other risk assets were already under pressure.

Shares are higher by 21% on Friday as bitcoin climbs from yesterday’s low of $60,000 to back above $70,000.

The two analysts agree the core debate centers on solvency, not profitability. Strategy holds 713,502 bitcoin, worth nearly $50 billion at current prices, against about $8.2 billion in convertible debt. Benchmark analyst Mark Palmer said the company would only face true balance-sheet stress if bitcoin fell below $8,000 and stayed there for years. Management emphasized on the earnings call that none of its debt carries covenants or triggers tied to bitcoin’s price or its average purchase cost.

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TD Cowen’s Lance Vitanza also focused on the durability of the capital structure. He argued that Strategy was built to amplify bitcoin’s volatility by design, with common equity trading at roughly 1.5 times bitcoin’s swings. That leverage cuts both ways. Vitanza said the company’s $2.25 billion cash reserve and staggered debt maturities mean there is no reasonable scenario where Strategy would be forced to sell bitcoin in the near term, even if prices remain depressed.

Where analysts differ is less about risk and more about framing. TD Cowen leaned into Strategy’s role as a “digital credit engine,” highlighting its growing preferred equity business and the liquidity of its STRC preferred stock, which pays an 11.25% annualized dividend. Benchmark placed more weight on bitcoin’s long-term price path and the optionality embedded in Strategy’s equity if bitcoin rallies.

Both firms remain constructive on the stock. Benchmark reiterated a Buy rating with a $705 price target, based on a sum-of-the-parts model that assumes bitcoin reaches $225,000 by the end of 2026. TD Cowen also maintained a Buy rating, arguing that Strategy remains one of the most efficient ways for investors to gain leveraged bitcoin exposure outside of ETFs, though it did not disclose a specific price target in its note.

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Crypto World

Oil Rose 3% to Open the Week: Here’s What Moved the Market on Monday

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Oil prices jumped more than 3% on Monday, pushing Brent crude above $116 a barrel. West Texas Intermediate (WTI), the US benchmark, climbed to roughly $102 per barrel.

The latest rise comes as the US-Israel war on Iran entered its fifth week with no signs of abating.

Oil Extends Its War-Fueled Rally 

Several escalatory developments over the weekend fueled the surge. President Donald Trump told the Financial Times he could possibly seize Kharg Island, the terminal that handles roughly 90% of Iran’s crude exports.

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The US president struck a mixed tone on diplomacy with Iran, saying he was “pretty sure” of making a deal with Iran but conceding that talks could still collapse.

Meanwhile, Iran’s parliament speaker warned that Tehran would “set them on fire” when American forces arrived and promised consequences for US-allied nations in the region. 

The oil price surge is far from over, according to market analysts, who warn that the prolonged closure of the Strait of Hormuz could drive crude even higher.

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“A scenario in which the Strait remains closed for an additional month would be consistent with oil prices rising towards $150/bbl and constraints on industrial consumers of energy supply,” Bruce Kasman, global head of economics at JPMorgan, said.

According to Bloomberg, US officials and Wall Street analysts have also begun discussing the possibility of crude reaching $200 per barrel.

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Asian Stocks Tumble, Crypto Feels the Pressure

The energy shock rippled across Asia. Google Finance data showed that Japan’s Nikkei 225 fell over 4.5%, while South Korea’s KOSPI dropped more than 4.3% as import-dependent economies repriced risk.

The volatility has spread to crypto markets, with asset prices dipping early in the morning before rebounding. 

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“The market briefly crashed just now — ETH dropped below $1,940 and BTC fell below $65,000,” Lookonchain reported.

Oil above $100 per barrel continues to pressure risk assets by fueling inflation expectations and delaying anticipated Federal Reserve rate cuts.

The post Oil Rose 3% to Open the Week: Here’s What Moved the Market on Monday appeared first on BeInCrypto.

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Lido DAO Mulls $20M LDO Buyback to Boost Token Price

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Lido DAO Mulls $20M LDO Buyback to Boost Token Price

Lido’s decentralized autonomous organization is considering a one-off $20 million buyback of its governance token to address so-called price dislocation, which is at “historically depressed levels” relative to Ether, according to the DAO. 

The proposal, submitted Friday, seeks permission to swap 10,000 Lido Staked Ether (stETH) tokens, currently worth $20 million from the DAO’s treasury for Lido DAO (LDO), arguing that LDO is undervalued.

“This is not a routine fluctuation. It represents one of the most significant dislocations between LDO’s market price and its underlying protocol fundamentals in the token’s history.”

A token buyback of this size could boost the price of the token, which has fallen roughly 96% from its all-time high. In November, a Lido DAO member pitched an automated buyback mechanism for LDO to improve the token’s price. However, that proposal hasn’t been implemented.

LDO’s change in price relative to ETH since 2024. Source: Lido DAO

Lido DAO pointed out that LDO is trading at a steep discount to Ether (ETH) at a ratio of 0.00016, roughly 63% below its two-year median.

This is despite the protocol holding the top spot of the Ethereum liquid staking market, with a 23.2% share of staked Ether, according to Dune Analytics data. The protocol’s dominance has even been flagged as a centralization risk to the network in previous years.

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Share of Ethereum network validators. Source: Dune Analytics

Related: Ethereum builders propose ‘economic zone’ to tackle L2 fragmentation 

LDO is currently trading at $0.30, down 95.9% from its $7.30 high set in August 2021, according to CoinGecko data. LDO’s $255 million market cap makes it the 141st largest token by value at the time of writing.

“That dislocation is not justified by a proportional deterioration in protocol performance,” Lido DAO said. 

Lido DAO proposes buying stETH in batches

Lido DAO proposed buying up to 10,000 stETH in smaller batches of 1,000 to buy LDO. 

Lido DAO said it would use limit orders or adopt a dollar-cost averaging strategy to avoid market volatility. 

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