BTIG: Bitcoin halving will be a positive catalyst, MicroStrategy's stock still has room to rise

Zhitong
2024.04.06 06:49
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BTIG analysts predict that the Bitcoin halving will drive up MicroStrategy's stock price, with the target price raised to $1800, still with a 10% upside potential. The analyst pointed out that the Bitcoin halving has led to a significant increase in Bitcoin price in the past three events, and the halving event expected to occur this month is likely to be a positive catalyst for Bitcoin and MicroStrategy stock prices. The analyst also stated that investors will continue to embrace Bitcoin as a safe haven against inflation. In addition, MicroStrategy holds over 214,000 Bitcoins this year, and investors are willing to pay a premium for the company's Bitcoins

According to the Zhitong Finance and Economics APP, BTIG analyst Andrew Harte stated that the stock price of MicroStrategy (MSTR.US) has risen by nearly 130% so far this year, driven by the surge in Bitcoin prices. The analyst believes that as Bitcoin continues to rise, there is further room for MicroStrategy's stock price to climb. The analyst reiterated a "buy" rating on the stock and raised the target price to $1800, indicating a potential 10% upside for the stock. The average target price given by four analysts tracked by the media is $1999.99, which matches the intraday record high set by the stock in March.

As of March 18th, MicroStrategy holds over 214,000 bitcoins. In a report, analysts stated that the premium investors are willing to pay for the company's Bitcoin exposure has "reached a new normal of more than double." The analyst said, "We expect the company to benefit from Bitcoin as a catalyst in the next year, especially with the Bitcoin halving event expected to occur this month." The highly anticipated Bitcoin halving event means a reduction in Bitcoin's supply, and previous halving events have driven Bitcoin prices higher.

The analyst believes that the potential Bitcoin halving event in April should be a positive catalyst for both Bitcoin itself and MicroStrategy's stock price. He stated, "After the previous three halving events, Bitcoin's price increased by 80 times, 4 times, and 6 times in the following year, respectively." "Therefore, we believe that investors will see Bitcoin as a safe haven against inflation, and institutional investors will continue to embrace Bitcoin."

Bitcoin has risen by over 50% so far this year. While this has boosted MicroStrategy's stock price, it has also hindered the company's ability to raise funds to purchase more digital assets strategically. Additionally, the close connection between the stock and a cryptocurrency remains highly risky. Although the stock has outperformed Bitcoin this year, it will suffer greater losses if Bitcoin declines.

The analyst further elaborated on the upside and downside scenarios for MicroStrategy. He estimated that if the premium narrows and regulatory pressures impact the cryptocurrency market, Bitcoin could fall to $48,000, and the stock price could drop to $700. However, the analyst added that in a bullish scenario, Bitcoin could rise to over $90,000, and the stock price could increase to $2700

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