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Microstrategy stock target raised at BTIG ahead of Bitcoin halving event

The MicroStrategy stock target was raised by one analyst this week in anticipation of the upcoming Bitcoin halving event.

The move suggests further confidence in MicroStrategy's strategic adoption of Bitcoin and its potential impact on the company's valuation. As the cryptocurrency market braces for a significant milestone, MicroStrategy's approach to buying Bitcoin positions it as a go-to stock in the cryptocurrency space.

Microstrategy stock rallies as Bitcoin hits record highs

MicroStrategy's (NASDAQ:MSTR) stock has experienced a significant surge amidst Bitcoin's continuous ascent to fresh record highs.

The company recently raised $782 million in a debt sale, specifically to acquire additional Bitcoin. The company now holds well over 200,000 Bitcoins. As a result of the leading crypto’s stellar performance, MicroStrategy's stock has surged more than 133% this year and over 432% in the last 12 months.

The unwavering confidence in Bitcoin's potential, coupled with MicroStrategy's strategic investments, continues to be a driving force behind the rally amidst the cryptocurrency's record-breaking surge.

Microstrategy stock to continue gaining - BTIG

Analysts at BTIG are optimistic about the potential gains for investors in MSTR, with the firm raising its price target for the stock to $1,800 per share from the previous target of $780.

BTIG stated that MSTR's stock rally has been driven by three things: “1) the price of bitcoin has rallied 50%, which benefits MSTR's corporate strategy of acquiring and holding bitcoin (~214k in total), 2) accretive capital raises in the form of equity and convertible debt which has increased the number of bitcoin per share for equity holders, and 3) the implied premium of MSTR's bitcoin holdings within a sum-of-the-parts (SOTP) valuation analysis has increased to more than 2x,
compared to ~1.5x on average during the last year.”

The firm thinks the implied premium of the company's Bitcoin holdings in their Sum of the Parts analysis has settled into a new norm above 2x. In addition, BTIG also expects the company to benefit from catalysts during the coming year, specifically the Bitcoin halving event estimated to take place this month.

During a halving event, which occurs after 210,000 blocks are mined in the Bitcoin network (every 4 years), the number of BTC rewarded to ecosystem participants is cut in half.

The Bitcoin halving events have a history of dramatic increases in the Bitcoin price, according to the firm. “The upcoming Bitcoin halving has been a catalyst behind the rally in the price of Bitcoin, in our view,” they wrote.

“Our 2.4x bitcoin premium estimate within our SOTP valuation seeks to reflect the range the premium has recently traded (2.0x to 2.6x) and also seeks to capture potential upside from bitcoin price appreciation following the upcoming Bitcoin halving event.”

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CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 76.3% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.