Although Strategy’s (MSTR) aggressive buying of bitcoin (BTC) has sent its shares soaring over 2,500% over the past five years, one analyst argues that the reverse could soon be the case.

“While we were negative on several respects upon initiation, we have gained incremental confidence that the convertible issuance strategy is likely tapped,” wrote Monness Crespi analyst Gus Gala, downgrading MSTR to sell just two weeks after initiating coverage at neutral.

Strategy currently holds 528,185 BTC on its balance sheet and has been buying sizable quantities nearly every week for the past few months, mostly funded by common share issuance and also sales of its initial preferred series STRK.

Gala's price target of $220 suggests just shy of 30% downside from the current price in the $300 area.

Gala argued that it will become increasingly more difficult for MSTR to raise money to buy bitcoin via share issuance, forcing the company to shift towards fixed income vehicles.

“If fixed income securities do not become a greater portion of issuance, the BTC treasury strategy will look increasingly challenged.”

Gala noted that MSTR has already used $18.6 billion of its $21 billion common share at-the-market offering. The company also raised another $711 million last week via STRF, its second series of preferred stock.

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