Strategy Stock Could Climb as New Rival Twenty One Validates Its Bitcoin Strategy

TD Cowen says the launch of Twenty One could shift institutional sentiment and validate MSTR’s long-term bitcoin strategy.

There were both believers and skeptics in the bitcoin buying strategy of Michael Saylor. However, a brand-new rival has just emerged, and at least one Wall Street analyst believes that the fact that it already has nearly $4 billion worth of Bitcoin on its balance sheet is a positive sign. When SoftBank, Tether, and Cantor Fitzgerald unveiled plans to launch a new bitcoin investment company called Twenty One, structured explicitly around holding bitcoin as its primary business, many called it a significant rival to Saylor's Strategy (MSTR). Its day-one bitcoin balance sheet holding would rank it as the third-largest publicly held bitcoin treasury on day one.

A dominant company's market share and opportunities for capital raises could be hindered by such a large competition, as Twenty One is already potentially launching with over 42,000 BTC (worth nearly $4 billion at spot price), according to traditional finance.

"The proposed launch of Twenty One reflects the most-meaningful validation of Strategy's bitcoin treasury operations to date," according to TD Cowen analysts Lance Vitanza and Jonnathan Navarrete, leaves the analysts "incrementally bullish" on the stock. The analysts added that the new rival could even convert MSTR's biggest skeptics, institutional investors, into believers in Saylor's bitcoin buying strategy. The move would also increase demand for bitcoin from a high-profile entrant, which could outweigh any pressure on Strategy’s cost of capital and attract more capital into buying bitcoin.

The analysts wrote, "Certainly this is what Michael Saylor professes to believe," referring to the Strategy founder's persistent call for more businesses to implement strategies of a similar nature.

MSTR is expected to hold 757,000 BTC by the end of fiscal year 2027, or approximately 3.6% of the total supply of bitcoin, according to TD Cowen's projections and the company's $550 price target. TD Cowen estimates that the stash could be worth $129 billion if bitcoin reaches an average price of $170,000 by then, according to the analysts. The market already recognizes this rivalry's positive influence. The shares of Cantor Equity Partners (CEP), Twenty One's SPAC vehicle, have already climbed as much as 130% since the announcement, while MSTR stocks held strong.