- Analyst Mark Palmer from Benchmark-StoneX rejects comparisons between Strategy’s volatile STRC and the collapsed Terra ecosystem.
- STRC is not a stablecoin and cannot “depeg” like TerraUSD; it is a dividend-paying preferred stock indirectly backed by Bitcoin.
- The stock traded as low as $82.53 last week and closed around $88.65, well below its $100 par value, while the firm’s shares continued a downward streak.
Analyst Mark Palmer from Benchmark-StoneX argued on Monday that the recent pressure on Strategy’s flagship STRC product is “fundamentally misguided” when compared to the 2022 collapse of Terra. He stated that alarmist social media commentary overlooks core structural differences between the dividend-paying stock and the algorithmic tokens that erased $40 billion. “STRC is not a stablecoin,” Palmer underscored, dismissing comparisons to TerraUSD. The analyst noted it is not backed by an algorithmic arbitrage mechanism like Terra’s mint-and-burn framework.
STRC fell to a record low of $82.53 last week, evoking painful memories for some investors. However, it recovered slightly to close at $88.65 on Monday, according to Yahoo Finance. The product is engineered to trade around its $100 par value, and its price movements have been cyclical since launch. When it trades above this level, Strategy issues more shares to buy Bitcoin.
Consequently, the firm’s ability to purchase Bitcoin is currently constrained. However, Palmer emphasized this represents a less efficient funding engine, not a broken model. Strategy has other levers to pull, such as potentially increasing the dividend rate or accumulating cash reserves to ensure payments. The company recently signaled it now holds 847,363 Bitcoin, a sum valued at approximately $54.5 billion.
Meanwhile, Benchmark-StoneX reaffirmed its $570 price target for Strategy shares, far above the stock’s recent trading level. On Monday, the company’s shares fell 2.8% to $109, marking their fifth consecutive daily decline. This performance extended a negative streak despite the analyst’s bullish long-term outlook.
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