Investment banker Benchmark has stated that MicroStrategy shares are a good investment, with a price target of $990, as the software firm is poised to benefit from institutional demand and the upcoming Bitcoin halving event in April. The company currently holds over $11 billion worth of Bitcoin.
According to Benchmark senior analyst Mark Palmer, MicroStrategy offers investors a timely opportunity to capitalize on the Bitcoin halving. Palmer also predicts that the increased demand for Bitcoin, driven by the introduction of new US spot Bitcoin exchange-traded funds (ETFs), will further boost MicroStrategy’s share price.
Spot Bitcoin ETFs have already seen significant net inflows of $6 billion since their launch on January 11, excluding Grayscale’s GBTC.
Palmer also points to the Bitcoin halving as a catalyst for MicroStrategy’s upward price movement. The halving refers to the reduction in rewards for Bitcoin miners, which decreases the future supply of new Bitcoin and is seen as a positive long-term factor by crypto market experts.
He cites previous halvings in 2012 and 2016, which resulted in substantial price increases for Bitcoin. The halving in May 2020 preceded Bitcoin’s surge from $8,572 to an all-time high of $67,566 in 2021.
MicroStrategy employs a levered operating strategy, using debt financing and share sales to purchase Bitcoin without additional fees, which Palmer believes will benefit the company as long as the price of Bitcoin continues to rise.
On February 26, MicroStrategy acquired an additional 3,000 BTC, bringing its total holdings to 193,000 BTC, valued at over $11 billion.
Currently, MicroStrategy’s share price is $871, representing a 9.4% increase for the day. Bitcoin is trading at $57,083, with a 9.2% gain over the past week, largely driven by strong institutional demand.
Benchmark sets $990 target price for MicroStrategy, seeing it as a timely opportunity amid Bitcoin halving.