Strategy, Inc.'s identity has long centered on converting as many dollars as possible into bitcoin. Analysts are now endorsing the company’s evolving approach, which includes holding more cash, arguing that a larger dollar reserve is essential to its long-term aim of buying more BTC.
"Although in the past we've had 100% allocation to BTC, I don't think it'll be 100% in the future. I think it'll be a mix," Strategy Executive Chairman Michael Saylor said Thursday on the company's earnings call. "Maybe the best way to buy the most bitcoin is not to buy the most bitcoin."
TD Cowen and Benchmark reiterated their buy ratings on Strategy (MSTR) following the company's second-quarter earnings call, noting that returning its STRC preferred stock to par has become management's central objective.
TD Cowen analyst Lance Vitanza wrote that the most notable takeaway from the call was the intensity of management's focus on STRC. Executives repeatedly described returning STRC to par as a core objective, citing growing institutional adoption despite the security's recent dislocation.
Benchmark's Mark Palmer reached the same read, noting that Saylor and his team devoted the bulk of the 90-minute webinar to a single goal centered on restoring STRC to its $99 to $100 range so it can again serve as the primary engine for raising capital to buy bitcoin (BTC).
Meanwhile, Mizuho analysts said Strategy continued to "weather the storm" amid the sharp bitcoin price decline during the quarter.
STRC as the load-bearing security
Saylor called returning STRC to par the company's focus, according to Palmer, dismissing anything else as a distraction and a waste of time.
Indeed, Saylor argued that demand for the short-duration, low-volatility digital credit STRC offers is 50 to 100 times larger than for any other instrument in Strategy's capital structure. That's why the company is consolidating its efforts around it rather than designing new securities, according to the note.
Both TD Cowen and Benchmark pointed to the same adoption data.
Institutional holdings of STRC nearly tripled from $1.1 billion in mid-March to $3.1 billion as of July 1, taking institutions to 29% of the security.
Vitanza put institutional ownership at roughly 29% from 22% in March, with the average institutional position size doubling to about $3.5 million. He framed the push to par as less about defending a single security than about supporting the credibility, liquidity and scalability of what Strategy views as a much larger Digital Credit ecosystem.
Where the firms split
Benchmark reduced its price target to $435 from $570, citing a sum-of-the-parts analysis and a reset of its year-end 2026 bitcoin assumption to $100,000 from $125,000. TD Cowen carried a $260 target and Buy rating from late June, itself a cut from $400 earlier that quarter.
Moreover, Palmer detailed Saylor's account of the June 26 episode in which STRC briefly traded down to around $70. Saylor attributed the air pocket to traditional broker-dealers that had extended credit against STRC at 70% to 80% advance ratios, then slashed those ratios or pulled lines entirely when volatility spiked, according to the note.
Palmer wrote that Strategy has about $975 million remaining under its STRC buyback authorization after a $25 million repurchase last week, and that management would act as a disciplined buyer below $100. Saylor characterized the roughly $1.2 billion gap between STRC's notional and market value as a dislocation the company was certain it would cure, the note said.
A quarter in the red
The reiterations follow results that swung Strategy from a $10 billion profit in the second quarter of 2025 to an $8.2 billion loss this year, driven almost entirely by unrealized paper losses on its bitcoin holdings, with bitcoin trading more than 40% below its year-earlier level.
The company grew its bitcoin holdings 11% during the quarter to a peak of 846,000 BTC before it began selling, paused purchases for five consecutive weeks to build a U.S. dollar reserve, and last reported owning 843,775 BTC in an 8-K filing.
Management rebutted criticism of those sales, stressing that Strategy had bought nearly 175,000 bitcoins year-to-date while selling only about 3,600, or roughly 48 bought for every one sold, Palmer wrote.
CEO Phong Le said the company reduced its convertible debt by 18% to $6.7 billion in the quarter while lifting its dollar reserve 12% to $2.4 billion.
"Our objective is for STRC to trade over time at $99 to $100," Le said. He said the company would repurchase shares in a disciplined manner if the security trades below $100.
CFO Andrew Kang said the dollar reserve sits at $3.75 billion, enough to cover preferred dividend payments and interest obligations for roughly two years.
Strategy shares closed Thursday's session at $97.70 and fell more than 5% on Friday, as tracked by The Block’s equities price page.
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