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According to Benchmark’, MicroStrategy ’‘s Bitcoin assets have exceeded $11 billion and the company’s shares could benefit from institutional demand in the Bitcoin space and from the Bitcoin halving.
The investment bank Benchmark’s analysis suggests MicroStrategy shares are obtaining a “buy” recommendation with a target price of $990 because the Bitcoin purchasing software provider is ready for big gains stemming from institutional demand and the halving event in April.
Benchmark senior analyst Mark Palmer pointed out in a research report dated 27 February that MicroStrategy (MSTR) provides investors with a “timely move” concerning the forthcoming Bitcoin halving. He mentioned that the company’s Bitcoin assets have risen above $11 billion.
Palmer also predicted that increasing demand for Bitcoin, triggered by new US spot Bitcoin exchange-traded funds (ETFs), would support MicroStrategy’s share price.
On 26 February, excluding Grayscale‘s GBTC, ten US Bitcoin ETFs saw a significant net inflow of $519 million and since their launch on 11 January, have generated over $6 billion in net inflows.
Additionally, Palmer also looked at the impending Bitcoin halving as a factor predicting an upward price movement for MicroStrategy.
The halving of Bitcoin refers to miners’ rewards being cut in half. This results in a decrease in the market supply of new Bitcoin in the future and is widely perceived as a long-term catalyst that supports the bull market by crypto market experts.
Palmer pointed out that the first halving of Bitcoin in 2012 saw its price rise from about $12 to almost $1,000, and inside the year following the halving in July 2016, Bitcoin’s price rose from $650 to $2,250.
“The halving in May 2020 came prior to Bitcoin’s remarkable increase from $8,572 in 2021 to its all-time high of $67,566“, he added.
MicroStrategy is implementing a tactic known as a “leveraged business strategy” using debt financing and share sales to finance its Bitcoin holdings without additional costs. This is designed to increase its direct exposure to Bitcoin and, according to Palmer, will favor the company as long as there is an ongoing rise in the price of Bitcoin.
On 26 February, MicroStrategy purchased an additional 3,000 Bitcoin, and the total assets were raised to 193,000 BTC. This investment is currently worth an average of $11 billion.
The share price of MicroStrategy is currently at the level of $871, increasing by 9.4% within the day, according to TradingView data.
Meanwhile, the price of Bitcoin is trading at $57,083 and recorded a gain of 9.2% last week. This is largely supported by strong institutional demand for the cryptocurrency.
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