Bitcoin momentum weakens, impacting leveraged assets; TD Cowen lowers MSTR target price to $440

January 16 News, investment bank TD Cowen has once again lowered its stock outlook for MicroStrategy (MSTR), reducing its 12-month target price from $500 to $440. This is the second time the firm has adjusted its expectations since December 2025, primarily due to weakening Bitcoin momentum and market caution toward crypto-related stocks.

TD Cowen pointed out that MicroStrategy's stock price is highly dependent on Bitcoin's performance. As Bitcoin fails to sustain a breakout and enters a consolidation phase, the appeal of MSTR as an “enterprise Bitcoin leverage tool” is diminishing. Even minor fluctuations in Bitcoin can be amplified through balance sheet effects, directly impacting the stock price.

Analysts believe that MicroStrategy has been favored by the market in recent years due to its large-scale Bitcoin holdings, achieving significant premiums during bull markets. However, when Bitcoin lacks a trending upward movement, the same strategy can increase downside risks. TD Cowen's recent downgrade reflects a risk reassessment rather than a comprehensive negative view of the company's fundamentals.

The report also mentioned that recent volatility in the crypto market has increased uncertainty in valuation models. In this environment, MicroStrategy's stock performance is almost tightly correlated with Bitcoin's price, and its software business's contribution to valuation has been significantly weakened. This structural characteristic is raising concerns among more traditional institutional investors.

From a macro perspective, TD Cowen's adjustment also indicates a shift toward a more cautious stance on crypto-related stocks. In a tightening global liquidity environment and waning risk appetite, Bitcoin and its derivatives are unlikely to sustain previous high valuations.

Looking ahead, MicroStrategy's stock prospects will still depend on whether Bitcoin can re-establish a clear upward trend. Until then, institutional investors are more likely to focus on valuation discipline and risk management. For investors, the current phase tests not just sentiment but also the ability to withstand volatility and uncertainty.