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Grayscale Bitcoin Mini Trust (BTC)
With the next Bitcoin halving set to take place later this month and the new supply of Bitcoins reduced by half, shares of MicroStrategy (MSTR) will continue to rise, analysts at Benchmark said on Monday.
The company reiterated its “Buy” rating on the stock and increased its price target to $1,875 from $990. MSTR shares traded at $1,608 in Monday's premarket session, up 11.74%.
“We believe MSTR, a leveraged play on Bitcoin, is particularly well positioned to benefit from an upcoming catalyst: the fourth Bitcoin halving,” the analysts said in a research note.
MicroStrategy's new price target is based on the company's expectation that Bitcoin will reach $150,000 by the end of 2025. Historically, Bitcoin halving events (2012, 2016, 2020) were followed by an “explosive price rise” after each event.
The previous benchmark target for MSTR was based on the assumption that BTC would reach $125,000 by year-end 2025, but with BTC up around 27% since then, analysts have revised their target upward.
Demand for new spot Bitcoin ETFs will also amplify the impact of the halving event, according to analysts.
Additionally, MicroStrategy is expected to continue its aggressive Bitcoin buying. The company has increased its holdings of the cryptocurrency for 15 consecutive quarters and is expected to use its proceeds from capital markets transactions and excess cash from its enterprise software business to increase its holdings to 298,246 Bitcoins by 2025.
The fact that MSTR shares trade at an implied premium to their net asset value is justified, according to benchmark analysts, by the company's “demonstrated ability to tap the capital markets at very attractive interest rates… and then use the proceeds to purchase additional Bitcoins.” use.”
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