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In anticipation of the upcoming Bitcoin (BTC) halving slated for around April 20, brokerage firm Benchmark has highlighted MicroStrategy (MSTR) as a prime contender to reap significant benefits. Analyst Mark Palmer underscored the historical trend surrounding Bitcoin halvings, noting their correlation with explosive price surges post-event. This quadrennial occurrence involves a 50% reduction in miner rewards, effectively slowing down the rate of Bitcoin's supply growth.
Benchmark has revised its price target for MicroStrategy upwards to $1,875 from $990, all while maintaining a buy rating. This adjustment is rooted in the expectation that Bitcoin will soar to $150,000 by the close of 2025, up from the previous forecast of $125,000. The news propelled MicroStrategy shares, which surged over 11% to approximately $1,601 in pre-market trading.
Palmer elaborated on the potential impact of the impending halving, suggesting that it could be amplified by the concurrent rise in demand spurred by the emergence of spot Bitcoin exchange-traded funds (ETFs). Anticipating a surge in inflows once institutional investors dive into these ETFs, Palmer emphasized the potential for a significant demand shock in tandem with the supply shock created by the halving.
MicroStrategy's distinctive business model, primarily centered around the acquisition and retention of Bitcoin, has garnered attention. The company is anticipated to bolster its Bitcoin reserves using proceeds from capital market transactions and surplus cash generated from its enterprise software operations.
According to Benchmark's estimates, MicroStrategy is poised to hold 298,246 bitcoins by the end of 2025, a notable increase from the 214,246 coins in its possession as of March 19. Rival brokerage firm BTIG also weighed in, suggesting that MicroStrategy's premium over Bitcoin is underpinned by investors seeking exposure to digital assets who may face barriers to investing directly in the cryptocurrency or ETFs. Additionally, BTIG lauded MicroStrategy's ability to raise capital effectively to purchase additional Bitcoin, further solidifying its position in the digital asset space.
By fLEXI tEAM