MicroStrategy is anticipated to see further gains in its stock performance with the upcoming Bitcoin halving event.
The halving is anticipated to happen on April 20. Historically, the halving has triggered price increases for Bitcoin as the supply of new tokens decreases. Investors and analysts follow this event closely because it tends to change the cryptocurrency market behavior.
Bloomberg’s recent report has brought news of MicroStrategy’s bright future, predicting that the company’s shares might rise further after the halving. The firm’s investment in Bitcoin has already resulted in its stock price growth of 150%. As the cryptocurrency market is expected to react positively to the halving, additional development is expected. The changing setup of the Bitcoin supply regime is expected to create an ideal market for price surges to the advantage of MicroStrategy’s investment strategy.
MicroStrategy’s 150% surge — driven by a big bet on Bitcoin — has the scope to climb even further as the cryptocurrency soars, according to analysts at BTIG. https://t.co/kAWF8p2wWX
— Bloomberg (@business) April 5, 2024
Analysts have revalued the stock price of the company and its Bitcoin investment strategy because of the optimism with which MicroStrategy is associated. Andrew Harte, analyst at BTIG, has just increased his MicroStrategy price target to $1,800, which suggests no less than 10% upside from the current levels. This new target is a quantum leap from his prior estimate of $780, indicating a bullish outlook on the company’s performance and the impact of bitcoins’ price movements.
Moreover, the price target revisions result from MicroStrategy’s ongoing support of Bitcoin, which is supported by the fact that they were still holding 214,000 tokens in mid-March. The company’s stock gains have mimicked or surpassed, at times, the cryptocurrency. One of the signs that Bitcoin as a virtual asset has become a real investment is the willingness of investors to pay a premium for MicroStrategy’s exposure to Bitcoin.
MicroStrategy in the Crypto Space
In addition to benefiting from the Bitcoin halving, MicroStrategy has also embarked on moves aimed at consolidating its position in the cryptocurrency market. The company announced its intention to upsize its convertible senior notes offering to $525 million after the most recent upsizing to $700 million. Such moves are MicroStrategy’s macro strategy to strengthen Bitcoin’s position, which reveals its trust in the coin’s worth and prospects.
Furthermore, the company’s considerable investment in Bitcoin reflects its understanding of the digital currency as an essential part of its investment portfolio. To better its financial position and to fortify itself as a leader in the rapidly growing cryptocurrency industry, MicroStrategy decided to increase its Bitcoin holding.
The Road Ahead: Opportunities and Risks
With the approaching Bitcoin halving event, MicroStrategy’s stock could benefit from the expected positive impact on Bitcoin prices. Data from previous halvings suggest that the price of Bitcoin could surge dramatically in the first year after the event. Such a tendency creates a lot of hope for MicroStrategy, which has made huge investments in cryptocurrency.
Nevertheless, the company’s heavy dependence on Bitcoin creates risks, especially if the crypto market experiences regulatory crackdowns or severe price declines. The analyst Andrew Harte defines the circumstances in which MicroStrategy’s stock could come under pressure, such as if the premium on Bitcoin holdings is reduced or adverse market conditions.
However, the upcoming halving acts as an immediate force that can push Bitcoin and MicroStrategy’s stock to the new highs.
Also read: Bitcoin Cash (BCH) Price Surge by 14% Following Successful Halving
