Benchmark Predicts Surge in MicroStrategy Shares, Backed by Rising Institutional Bitcoin Demand
Summary:
Benchmark, an investment banking firm, recommends buying MicroStrategy shares, projecting a target price of $990 by the end of 2025. The Bitcoin software company, currently holding over $11 billion in Bitcoin, is expected to gain significantly due to ascending institutional demand and the upcoming April Bitcoin halving event. This bullish forecast also factors in a high interest boosted by new US spot Bitcoin exchange-traded funds and the firm's leveraged strategy to increase its direct exposure to Bitcoin.
Benchmark, an investment banking firm, suggests purchasing shares from MicroStrategy, a Bitcoin (BTC) software company, with a prospective target price of $990. Analysts predict substantial earnings for the software company due to a heightened demand from institutions and the forthcoming halving event in April, according to a February 27 research report. Benchmark's senior analyst, Mark Palmer, noted that investing in MicroStrategy (MSTR) provides a timely opportunity to capitalize on the impending Bitcoin halving event. MicroStrategy possesses Bitcoin assets to the value of over $11 billion.
Palmer's $990 target price for MSTR is underpinned by his assumption that Bitcoin value will escalate to $125,000 by the close of 2025. He also anticipates a rise in MicroStrategy's share price, given the increasing interest in Bitcoin fostered by the new US spot Bitcoin exchange-traded funds (ETFs).
A significant net inflow of $519 million was noted for the ten U.S. Bitcoin ETFs, excluding Grayscale's GBTC, on February 26. Since their launch on January 11, a total exceeding $6 billion net inflows have been reported for these ETFs.
Palmer also focused on the approaching Bitcoin halving, scheduled for April 20, as another potential boost for MicroStrategy's price. Bitcoin halving, a process where miners' rewards are cut by half, decreases the future supply of fresh Bitcoin and is often regarded as a bullish long-term stimulant by cryptocurrency experts.
MicroStrategy has taken up a "levered operating strategy", leveraging debt finance and share sales to cover Bitcoin purchases without extra fees. This strategy is aimed at increasing the company's direct Bitcoin exposure, which Palmer believes will benefit the firm if Bitcoin prices continue to increase. On February 26, MicroStrategy added another 3,000 Bitcoin to its resources, bringing the total to 193,000 BTC, valued just above $11 billion.
MicroStrategy's current share price is $871, marking a 9.4% rise for the day. The share price has seen a growth of 230% over the previous year. Bitcoin, currently trading at $57,083, has seen a 9.2% increase over the last week, primarily driven by robust institutional demand.
Published At
2/28/2024 4:44:21 AM
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