Bitcoin Promoter Strategy (STR) Market Cap Is Being Miscalculated, According to TD Cowen Analysts! Here's Why

TD Cowen countered criticism that Strategy’s (STR) market capitalization should be indexed solely to Bitcoin assets, stating that this approach is logically flawed.

TD Cowen: Strategy's Premium Value Justified by Bitcoin Capital Cycle

Analysts argue that the company's aggressive share issuance increases investors' stake in the stock rather than diluting it.

Strategy's market capitalization currently stands at $124.3 billion, with a total Bitcoin holding of approximately $72 billion. This puts the company's trading premium over its net asset value (NAV) at 72.6%. TD Cowen analysts Lance Vitanza and Jonnathan Navarrete say this premium cannot be explained by the “big fool theory.”

“Critics argue that Strategy's valuation is based solely on another investor in the market buying at a higher price. But this is an incomplete perspective that ignores both its business model and its capital deployment strategy,” they said.

According to TD Cowen, the Strategy increases the amount of Bitcoin per share by channeling low-cost capital into Bitcoin. This strategy provides an advantage that neither individual investors nor competing institutional firms can easily replicate. It emphasizes that the company is able to raise capital through low-interest borrowing at 0.421%, which directly translates into Bitcoin returns.

900,000 $BTC Target in 2027

Last week, Strategy raised $739.8 million through the sale of 1.6 million new shares and three preferred stock issuances as part of its $21 billion at-the-market program. With this capital, it purchased 6,220 Bitcoins at an average price of $118,940. According to TD Cowen, this transaction increased the company's $BTC per share by 20.8% compared to January 1st.

While maintaining its $680 target price for Strategy shares, TD Cowen predicts the company could reach 900,000 $BTC by the end of 2027. This amount equates to 4.3% of the all-time Bitcoin supply.

The company also opened a new funding stream on Monday with the launch of a fourth series of perpetual preferred stock called Stretch (STRC). With reserves of 607,770 $BTC as of July 21, Strategy is currently the world's largest publicly traded Bitcoin holder.

*This is not investment advice.