Investment bank TD Cowen has revised its price forecast for Strategy, reducing it from $500 to $440 for the next twelve months. This adjustment stems from concerns that the company”s approach to acquiring more Bitcoin could lead to dilution, impacting the value represented by each share.
Currently, Strategy is set to acquire approximately 155,000 Bitcoins by fiscal 2026, a significant increase from earlier projections of 90,000. To finance this accelerated acquisition, the company plans to issue additional common shares and preferred stock. This move means that as more shares are issued, each existing share will represent a smaller fraction of the overall company, thereby diluting the Bitcoin attributed to each share.
Analysts at TD Cowen estimate that by 2026, the firm”s “Bitcoin yield” will stand at 7.1%, a reduction from the previous estimate of 8.8% and far below the 22.8% yield expected in 2025. This indicates that while the total amount of Bitcoin owned by Strategy will increase, the proportional benefit for existing shareholders may diminish.
Despite the recent downturn in Bitcoin prices, Strategy has not slowed its purchasing pace. The firm capitalized on the dip, selling about 6.8 million shares of its common stock and 1.2 million shares of its special preferred stock, known as STRC, raising around $1.25 billion. Almost all of these funds were allocated to acquire an additional 13,627 Bitcoins. Many analysts had anticipated a slowdown in Strategy”s buying activities given the lower Bitcoin prices; however, the company has opted for aggressive acquisitions, banking on a future price rebound.
TD Cowen”s analysts believe that this strategy hinges on the expectation of rising Bitcoin prices, which they foresee due to improving regulations and stronger economic indicators. The firm is likely to continue its share issuance strategy as long as Bitcoin prices remain suppressed.
Looking ahead, analysts predict that the price of Bitcoin could reach approximately $177,000 by December 2026, with expectations of further increases to around $226,000 by December 2027. As Bitcoin prices climb, the Bitcoin yield per share is anticipated to improve again, enhancing the value of each share.
While the analysts have lowered their near-term price target and yield expectations, they still advocate for investing in Strategy. They point out that the company”s preferred stocks may offer both income potential and the opportunity for capital appreciation if the stock price rises. For instance, the senior STRF preferred shares are projected to yield a return of roughly 30%.
Additionally, there is encouraging news regarding MSCI, an index provider that has chosen not to delist Bitcoin treasury companies, including Strategy, from its indexes. This development is seen as favorable for Strategy in the short term. However, analysts warn of ongoing uncertainty, particularly because major institutional investors, such as BlackRock, could view companies like Strategy as competitors, potentially influencing future index decisions.
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