TD Cowen cut its price target on Michael Saylor’s Strategy by 35% to $260, blaming Bitcoin’s ongoing weakness rather than the company itself. The reassessment landed even as Bitcoin clawed back above $60,000 on July 1 following remarks from Fed Chair Kevin Warsh.
TD Cowen, long one of the most bullish voices on Strategy (NASDAQ: MSTR), cut its price target 35% to $260 from $400 on June 30. The analysts, led by Lance Vitanza, pinned the reduction on Bitcoin’s ongoing weakness rather than anything happening inside the company.
That marks a meaningful walk-back from a bank that raised its Strategy target to $680 last July, when shares traded above $450. TD Cowen also now expects Bitcoin to end the year near $100,000, down from its earlier call of $140,000.
Bitcoin’s slump drags on Strategy
Bitcoin fell back below $60,000 last week and was trading near $60,109, down more than 15% over the past month. It is now off more than 50% from the record above $126,000 it hit last October.
Strategy’s stock has felt the pressure directly. Over the past month, MSTR has declined more than 34%, according to Yahoo Finance. In response, Strategy authorized a program to sell up to $1.25 billion of Bitcoin from its 847,363-coin stockpile to top off reserves if needed.
A bounce on Fed comments
Yet the mood shifted on July 1. Bitcoin broke past $61,000 in the evening before getting rejected and dropping back to $59,000, with trading volume up 11% over the past day. The move came after Fed Chair Kevin Warsh flagged inflation concerns but declined to signal the central bank’s July decision. According to Benzinga, Warsh said at a conference: “prices are too high.”
Traders read the remarks as easing the risk of near-term tightening. The CME FedWatch tool showed markets pricing a 71% likelihood of unchanged rates in July, though nearly a 50% chance of a rate hike in September.
Institutions stay cautious
TD Cowen is not alone in trimming its outlook. Citigroup cut its one-year Bitcoin target from $112,000 to $82,000, citing record monthly Bitcoin ETF outflows in June that point to softer institutional demand. Meanwhile, more than $450 million was liquidated across the crypto market over 24 hours, with $279 million in short positions wiped out. Whether the bounce holds may hinge on those flows turning.
Sources: TheStreet, Benzinga, The Globe and Mail
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