MicroStrategy is the publicly traded company with the largest holdings of Bitcoin globally. The latest research report from Wall Street investment firm Bernstein indicates that MicroStrategy's holdings will continue to increase and estimates that it will account for 4% of the total circulating supply of Bitcoin within the next 10 years. Meanwhile, Bernstein has raised the target price for the company's stock from 290 dollars to 600 dollars, expecting it to be achieved by the end of 2025.
Bernstein analyst Gautam Chhugani described MicroStrategy as a 'Bitcoin magnet', a company that continuously attracts global capital into the Bitcoin market. The report noted that MicroStrategy's unprecedented Bitcoin strategy has made the company a unique presence on Wall Street.
Gautam Chhugani pointed out that MicroStrategy's success relies on three key factors:
Whether investors are bullish on Bitcoin in the long term;
Whether the company has the ability to withstand liquidity risk and bankruptcy risk;
Whether it can continue to expand its capital scale and maintain competitiveness in the long term.
MSTR target price raised
In June this year, Bernstein set a target price for MicroStrategy at 290 dollars, when MSTR's stock price was only 148 dollars. However, with the stock price doubling over the past few months, with a cumulative increase of 509% year-to-date, MSTR has now surpassed 421 dollars. The latest target price of 600 dollars implies a further 42% upside potential for this stock.
MicroStrategy recently spent 5.4 billion dollars to acquire an additional 55,500 Bitcoins, bringing its total holdings to 386,700 Bitcoins.
Bernstein's 'base case' forecast predicts that MicroStrategy is expected to hold 4% of the total circulating supply of Bitcoin, approximately 830,000 Bitcoins, by the end of 2033. If Bitcoin prices exceed 1 million dollars by then, the value of these Bitcoins could reach 830 billion dollars.
Analysis suggests that the long-term convertible unsecured debt structure currently adopted by MicroStrategy minimizes the liquidity risk on the company's balance sheet, making it virtually unaffected by fluctuations in Bitcoin prices.
MicroStrategy has successfully raised 3 billion dollars in convertible bonds and 6.6 billion dollars in equity funding this year.
Although Bernstein analysts are optimistic about MicroStrategy's outlook, there are also conservative voices in the market. The well-known short-selling firm Citron Research believes that MicroStrategy's trading volume 'has completely detached from the fundamentals of Bitcoin', and thus has hedged by shorting MicroStrategy.
"Bullish on MicroStrategy's continued accumulation of Bitcoin! Bernstein raises MSTR target price" was originally published on (Blocktime).
