TD Cowen Lowers MSTR Price Target as Bitcoin Yield Projections Wane

TD Cowen analysts have cut their price target for Strategy (MSTR) to $440 from $500, citing concerns over Bitcoin yield projections. The firm maintained its 'buy' rating but emphasized that ongoing equity issuance is diluting shareholder value and reducing the company's Bitcoin yield metric. Strategy, formerly known as MicroStrategy, continues to aggressively purchase Bitcoin, acquiring 13,627 BTC for $1.25 billion in early January. This brings the company's total holdings to 687,410 BTC, valued at over $62.5 billion at current prices.

MSTR's stock price has struggled in recent months, trading at a 62% discount to its July 2024 peak. The firm's aggressive accumulation of Bitcoin has pushed its equity shares to over 300 million outstanding, up from 77 million in 2021. As a result, the company's market net-asset value (mNAV) has fallen to 0.726, signaling increased dilution for shareholders. TD Cowen analysts warned that the shift toward equity financing for Bitcoin purchases has reduced the company's per-share yield and pressured its stock valuation.

Bitcoin prices remain under pressure, trading near $90K ahead of the release of U.S. CPI data. Despite the bearish trend, Strategy continues to buy the dip, recently acquiring 1,283 BTC for $116 million at an average price of $90,391 per coin. The company has purchased over $1.1 billion in Bitcoin in recent weeks using proceeds from at-the-market stock offerings. This approach has drawn criticism from investors concerned about long-term equity dilution.

Why Did This Happen?

TD Cowen analysts attributed the price target cut to the declining Bitcoin yield. The firm expects Strategy to acquire approximately 155,000 BTC in fiscal 2026, up from a prior estimate of 90,000 BTC. However, the increased use of equity financing has reduced the BTC yield to 7.1% for 2026, down from 22.8% in 2025. This drop reflects the higher cost of funding Bitcoin purchases through equity sales rather than debt or cash reserves.

Analysts noted that the firm's strategy has not slowed during Bitcoin's recent price compression. Instead, Strategy has leaned into the dip, purchasing BTC at a time when its equity issuance is nearly in parity with Bitcoin prices. TD Cowen said this approach only makes sense if Bitcoin rebounds strongly, a scenario the firm still believes is likely. The bank forecasts a Bitcoin price of $177,000 by December 2026 and $226,000 by December 2027.

How Did Markets React?

Strategy's stock price has fallen 65% year-to-date as of January 16, 2026. The stock traded at $157.33 on January 12, 2026, after closing at $157.33 the previous day. The firm's short interest has risen to 10.23%, up from below 8% in 2025, indicating increased bearish sentiment. Meanwhile, Bitcoin's price has fallen 24% from its October 2025 record high of $126,000 but has gained 9.7% in 2026. According to market data, this reflects broader market dynamics.

The company's aggressive Bitcoin strategy has drawn mixed reactions from market participants. While some analysts view MSTR as a proxy for Bitcoin exposure, others warn that the firm's premium to Bitcoin holdings has collapsed to 10% from a peak of 100% in summer 2024. This compression has reduced MSTR's appeal for investors seeking a leveraged position in Bitcoin.

What Are Analysts Watching Next?

Market observers are closely monitoring Strategy's ability to maintain its Bitcoin buying pace amid declining prices and rising equity issuance. The firm's founder, Michael Saylor, has defended the strategy, arguing that valuation should be tied to operational performance rather than net asset value multiples. Saylor also pointed out that Strategy's approach aligns with broader trends in institutional Bitcoin adoption, including regulated spot ETFs and deeper derivatives markets. This analysis suggests a strategic shift in institutional participation.

Looking ahead, TD Cowen analysts expect Bitcoin yield to improve in fiscal 2027, with projections for an 8.1% yield and a Bitcoin dollar gain exceeding $13.5 billion. This would require a strong rebound in BTC prices, which are expected to benefit from favorable macroeconomic conditions and regulatory developments. However, analysts cautioned that volatility remains a key risk, with Bitcoin still needing broader government and institutional acceptance to compress price swings. According to industry reports, this remains a significant hurdle.

Meanwhile, Bitcoin's market structure has evolved with increased participation from institutional players. Vincent Liu, chief investment officer at Kronos Research, noted that regulated ETFs and deeper derivatives markets are improving liquidity and reducing speculative trading. This shift supports Strategy's long-term buying strategy but does not guarantee stability in the near term.