B. Riley buy ratings: Strategy, Strive on BTC-treasury reset

Strategy (MSTR) and Strive (ASST) have been sitting in the penalty box with the rest of the Bitcoin$62,581.94 treasury trade, but B. Riley just called the sector's slump a valuation reset and initiated both names at Buy, flagging the drawdown as a potential entry point. The bank's kickoff came as Bitcoin$62,581.94 hovered around $70,494, a level that still leaves a lot of 2025 to 2026 volatility in the rearview, and a lot of investor scar tissue still in play. ^[1]

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B. Riley's targets put numbers on that "fresh entry" framing: $175 for Strategy and $12 for Strive. At the time of publication, MSTR traded at $141.82 and ASST at $8.67, implying roughly 23% upside for Strategy and 38% for Strive versus the bank's targets. ^[2]

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Why the bitcoin-treasury trade cooled off

Bitcoin$62,581.94 treasury companies are basically public-market wrappers around Bitcoin exposure, plus whatever operating business sits underneath. When the trade is working, the wrapper can trade at a rich valuation because equity markets are willing to fund more Bitcoin purchases. When the trade is not working, that premium compresses fast, and equity issuance becomes a much harder sell.

B. Riley's core point is that the 2025 to 2026 drawdown compressed valuations across the treasury cohort, which in turn stalled equity-driven Bitcoin accumulation. This is the reflexive loop that cuts both ways:

Rising Bitcoin can lift treasury-company equities, which can make financing easier, which can fund more Bitcoin buys.
Falling or choppy Bitcoin can shrink equity premiums, making dilution more painful and new capital harder to raise.

That dynamic matters because the most aggressive treasury strategies have historically leaned on capital markets access, not just operating cash flow. When the bid for the equity dries up, the whole "buy more Bitcoin" flywheel slows.

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B. Riley's call: valuation reset plus a path to new funding

The bank's Buy initiations are not just "Bitcoin goes up" takes. The more interesting piece is the suggestion that the next leg of treasury growth could come from new digital-credit financing models, rather than the same old playbook of issuing common stock into strength. ^[3]

B. Riley specifically highlighted preferred-share financing as a tool that could help restart accumulation even if common equity valuations stay more grounded than they were at prior peaks. Preferred structures can, in theory, offer:

Less immediate dilution than common equity issuance.
Clearer income-like terms for capital providers (dividend, seniority, or conversion features, depending on the structure).
More flexible balance-sheet engineering for firms trying to stack Bitcoin without constantly tapping common shareholders.

None of this removes risk, it just changes the shape of it. Preferred financing can introduce fixed obligations and refinance risk, especially if macro conditions tighten or Bitcoin volatility spikes at the wrong time.

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Strategy (MSTR): still the bellwether for "BTC-beta with leverage"

Strategy is the OG of this trade and it still sets the tone. If you are watching positioning in the Bitcoin treasury sector, MSTR is the liquidity venue where institutions, hedge funds, and degen tourists tend to express the view first. That also means it becomes a crowded proxy during momentum phases, for better or worse.

B. Riley's $175 target versus $141.82 spot pricing suggests the bank sees room for the stock to re-rate if Bitcoin stabilizes and if funding conditions improve. The logic is straightforward:

Treasury premiums compress during drawdowns.
A stabilization phase can bring back buyers who want Bitcoin exposure with optionality on capital markets activity.
Better financing tools (including preferreds) can extend the runway for Bitcoin accumulation without relying entirely on common issuance.

The pushback from bears is also straightforward: MSTR is not spot Bitcoin. It is spot Bitcoin plus balance-sheet and financing complexity, plus equity-market mood swings. If Bitcoin chops sideways, the equity can bleed on carry, multiple compression, or simple fatigue.

Strive (ASST): smaller cap, bigger narrative sensitivity

Strive is a different animal, and the tape usually treats smaller treasury names like higher-beta expressions of the theme. B. Riley initiated ASST with a Buy and a $12 target while the stock traded $8.67. ^[4]

That upside math looks attractive on paper, but it comes with the usual small-cap reality: liquidity can be thinner, spreads can widen fast, and the "who owns the float" question matters more. When the sector is hot, smaller names can rip. When it cools, they can gap down on air.

B. Riley's framing suggests Strive's appeal is tied to the same reset dynamic: a drawdown that pushed valuations to levels where incremental good news (financing innovation, better Bitcoin tape, or improved investor risk appetite) can have outsized impact.

Market structure: what actually needs to change for the trade to work again

This sector does not need just a green Bitcoin candle. It needs a return of functional capital markets for treasury companies, and that depends on a few observable conditions:

1) Equity premiums stop sliding

When treasury companies trade at deflated valuations relative to their Bitcoin exposure and business prospects, issuing common stock becomes value destructive. If the market starts paying up again, the equity issuance machine can restart, but that is exactly what drawdowns tend to break.

2) Financing costs do not overwhelm the thesis

Preferred-share financing can be a bridge, but only if terms are survivable across Bitcoin volatility. If dividend burdens or covenants get tight, the structure can become its own overhang.

3) BTC volatility calms down, or at least trends up

Bitcoin around $70,494 is supportive optically, but the sector is reacting to the path, not the print. A grind higher tends to expand risk appetite, while violent two-way action usually punishes leveraged proxies.

Risks: dilution, forced selling, and "not actually BTC"

The cleanest bull thesis is "treasury valuations have reset and the next funding model is coming." The cleanest bear thesis is "reset valuations are a sign the market is done paying extra for financial engineering."

Key risks to track:

Dilution risk: even with preferreds, companies can end up issuing common into weakness if markets close.
Financing and refinancing risk: preferred and other credit-like instruments can create fixed obligations during drawdowns.
Premium collapse risk: if investors decide these equities should trade closer to plain Bitcoin exposure, the multiple can compress even if Bitcoin holds up.
Liquidity risk (especially for smaller names): ASST holders should watch spreads and volume, not just price.

Takeaway: B. Riley is buying the reset, but the tape still decides

B. Riley's Buy initiations on Strategy (target $175) and Strive (target $12) are a bet that the Bitcoin treasury slump did its job: it wrung out excess valuation and reopened the door for a more sustainable growth phase powered by preferred-share financing and other digital credit structures.

For traders, the practical read is simple: this is a sector-level re-rating call, not a guarantee. The thesis weakens if Bitcoin breaks down and stays heavy, or if treasury names cannot access capital without punitive terms or aggressive dilution. Bulls want to see Bitcoin hold key psychological levels (starting with the low $70,000s area) and treasury equities stabilize with improving liquidity and tighter spreads. If that does not show up, the "entry point" narrative turns into dead money fast.

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