Boutique investment banking firm Benchmark initiated coverage of MicroStrategy, issuing a research report on Tuesday that included a Buy rating and a $990 stock price target.
This forecast is based on the estimated year-end 2025 value of the company’s Bitcoin holdings and the estimated year-end 2025 value of its business intelligence software activities. In its price forecast, the benchmark assumed that the approval of several spot Bitcoin ETFs and the upcoming halving could act as a tailwind for Bitcoin price.
“Our price target for MicroStrategy is based on the assumption that the Bitcoin price will reach $125,000 by the end of 2025, with this move driven by increased demand driven by the SEC’s approval of a U.S. spot Bitcoin ETF in January. “The impact of the fourth Bitcoin halving, which is scheduled to occur in late April, is significant,” Mark Palmer, Benchmark senior equity research analyst, said in a report.
“The reduction in supply velocity due to the halving is likely to result in meaningful increases in cryptocurrency prices over the next few years,” Palmer added.
MicroStrategy’s stock price is currently at $860.75, up more than 8% in Tuesday morning trading.
bitcoin halving
The next Bitcoin halving is likely to occur in April of this year, and this event will result in a 50% reduction in the rewards miners receive for validating and adding new blocks to the blockchain.
A halving occurs every 210,000 blocks mined, which takes approximately 4 years to complete. The last halving occurred in 2020, reducing the block reward from 12.5 Bitcoin to 6.25 Bitcoin.
At the next halving, the block reward will drop again from the current 6.25. BTC
+1.91%
Up to 3.125 BTC per block. This mechanism is programmed into the Bitcoin protocol and is intended to control the supply of new Bitcoins, increasing the scarcity of Bitcoins over time.
According to The Block’s pricing page, the world’s largest cryptocurrency by market cap hit $57,210 at 10:34 PM ET, down more than 9% over the past 24 hours.
The GM 30 index, which represents the top 30 cryptocurrencies, rose 4.44% to 122.45 over the past 24 hours.
Bitcoin price is up more than 9% in the last 24 hours. Image: Block.
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