In a research note, Berenberg Capital Markets has expressed a bullish outlook on MicroStrategy (MSTR), a tech firm founded by Michael Saylor and focused on Bitcoin. The investment firm believes that the upcoming Bitcoin halving, scheduled for April 26, 2024, could have a significant impact on MicroStrategy’s shares, leading to potential gains in price. Berenberg has set a $430 price target for the company.
The analysts at Berenberg attribute MicroStrategy’s value to the substantial amount of Bitcoin it holds, currently at 152,333 BTC as of June 28. They draw attention to the historical pattern of Bitcoin rallies before and after previous halvings, stating that if this pattern continues, the next pre-halving rally could begin approximately four months from now. Previous halvings have seen Bitcoin prices surge by a minimum of 682%. For instance, following the first halving on November 28, 2012, Bitcoin’s price increased from around $12 to a peak of $1,164 within 367 days.
To gauge the potential magnitude of a future rally, Berenberg observes the overall demand for Bitcoin, which is difficult to predict. However, they point to the recent surge in spot Bitcoin ETF applications from prominent asset managers as evidence of increasing institutional adoption. The note also highlights BlackRock CEO Larry Fink’s pro-Bitcoin remarks, affirming a growing positive sentiment toward the cryptocurrency.
MicroStrategy’s shares have already experienced significant growth, rising nearly 180% since the beginning of 2023. Currently trading at $408, the company’s value is closely tied to the price of Bitcoin. Meanwhile, Bitcoin itself has seen an 84% increase since the start of the year.
With its strong focus on Bitcoin and the potential for a pre-halving rally, MicroStrategy stands to benefit from the anticipated price appreciation of the cryptocurrency. Berenberg Capital’s research report suggests that the company’s value could see a substantial boost as the halving approaches. Investors interested in cryptocurrencies and seeking exposure to Bitcoin’s potential upside may find MicroStrategy an appealing investment opportunity.