Investment bank Benchmark has given a buy rating and a target price of $990 to software development company MicroStrategy (MSTR). MicroStrategy’s stock price rose more than 9% yesterday, reaching $871.8, its highest level since April 2021, driven by the surge in Bitcoin.
According to a report by CoinDesk, Benchmark stated in its research report that MicroStrategy has a unique business model based on the acquisition and holding of Bitcoin (BTC), with Bitcoin accounting for a large portion of the software company’s valuation. Benchmark has given a buy rating to the stock with a target price of $990.
Analyst Mark Palmer pointed out that the launch of multiple physical Bitcoin ETFs has led to an increase in Bitcoin demand, coupled with the supply slowdown caused by the halving, which could drive a significant increase in cryptocurrency prices in the coming years. When Bitcoin is halved, miners’ rewards will decrease by 50% and token supply in the market will also decrease.
The fundamental assumption of their prediction is that the price of Bitcoin will reach $125,000 by the end of 2025.
Since announcing the Treasury Reserve Policy in September 2020, MicroStrategy has been using Bitcoin as its primary reserve asset. In addition to cash flow generated by its core business, the company continues to buy Bitcoin through debt and equity financing transactions.
Since its purchase of Bitcoin, its stock price (blue line) has closely followed the trend of Bitcoin (orange line), rising by 308%, while Bitcoin has risen by 282% during the same period.
MicroStrategy’s stock price rose more than 9% yesterday, reaching $871.8, its highest level since April 2021.
MicroStrategy recently announced another purchase of Bitcoin at an average price of over $50,000. The company now holds 193,000 Bitcoins, with a holding value of over $10 billion and an unrealized gain of nearly $5 billion.
With the recent surge in Bitcoin, MicroStrategy founder Michael Saylor also stated that the company will undergo a rebranding and position itself as a “Bitcoin development company.” He further advised investors to buy MicroStrategy stocks instead of Bitcoin, as MicroStrategy has also joined the AI trend.
Michael Saylor
MicroStrategy
Bitcoin