Crypto News– In a research report released on Tuesday, investment banking firm Benchmark highlighted MicroStrategy’s distinctive business model, centered around the acquisition and retention of bitcoin (BTC), which forms the majority of the software company’s valuation.
Amid Bitcoin Halving, Benchmark Advocates Buying MicroStrategy, Pointing to Strategic Timing
Benchmark initiated coverage of MicroStrategy with a buy rating and set a price target of $990. On Tuesday morning, MicroStrategy’s stock surged approximately 8% to $860.75.
Analyst Mark Palmer emphasized the potential for a significant increase in bitcoin’s price due to heightened demand resulting from the introduction of multiple spot bitcoin ETFs, coupled with the decreased token supply following the halving event. During bitcoin halving, miners’ rewards are halved, reducing the influx of new tokens into the market.
Benchmark’s valuation of MicroStrategy at $125,000 per bitcoin is based on the compound annual growth rate (CAGR) of bitcoin’s price over the last decade, projected over the next two years.
The report underlines that MicroStrategy’s software business serves as a stabilizing force for its valuation, generating cash flow that can be allocated towards additional bitcoin purchases.
Benchmark also points out that historical data indicates bullish trends in bitcoin’s price following previous halving events.
As the largest corporate holder of bitcoin, MicroStrategy recently bolstered its holdings by acquiring an additional 3,000 tokens for $155 million, as disclosed in a recent SEC filing, bringing its total holdings to 193,000 coins.
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