MicroStrategy Follows Bitcoin as MSTR Stock Gains 10%, What’s Ahead?
MicroStrategy made a similar move on Wall Street on Tuesday, February 27, as the Bitcoin price rose 10% to $57,000. MicroStrategy (NASDAQ:MSTR) share price increased by 9.46% on Tuesday, ending the trading session at $871.
MicroStrategy (MSTR) Leads Bitcoin
Since the beginning of 2024, Microstrategy and Bitcoin have delivered very similar returns, with both up 28% so far in 2024. However, over the past year, MSTR has significantly outperformed Bitcoin. While Bitcoin gained 141% on the annual chart, MSTR stock gained 242% at the same time.
One of the biggest reasons behind this rise in MSTR shares is that the company holds a huge amount of Bitcoin on its balance sheet. The company’s chairman, Michael Saylor, said that they will never be able to stop more Bitcoin in the future. Additionally, the company’s stock price continues to be closely correlated with Bitcoin price movements. Moreover, the value of the company’s total Bitcoin assets has now exceeded $10 billion, of which $4.4 billion is made up of profits alone.
Earlier on Monday, MicroStrategy purchased an additional 3,000 Bitcoins worth $155 million to its reserves. BTC price has already lost 10% of its value since then. Amid the massive rally in MSTR shares, the company’s market cap has already reached $15 billion.
Analysts expect Microstrategy (MSTR) stock to enter the S&P 500 index soon. If so, this could result in a massive liquidity infusion for MSTR.
MSTR Share Price May Rise to $990
Investment banking firm Benchmark launched coverage of MicroStrategy in a research report on Tuesday, affirming a buy rating along with a $990 share price target. This represents an additional gain of 15% over current levels.
Their forecasts are based on the expected valuation of the company’s Bitcoin holdings by the end of 2025, as well as the estimated value of its business intelligence software operations. Benchmark’s price projection takes into account the potential approval of multiple spot Bitcoin ETFs and the upcoming halving, which could provide further support to the Bitcoin price. Benchmark Senior Equity Research Analyst Mark Palmer said:
Palmer emphasizes that the reduced supply rate resulting from the halving has the capacity to push the price of the cryptocurrency significantly higher over the next few years.
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Bhushan is a FinTech enthusiast and has a good ability to understand financial markets. His interest in economics and finance draws his attention to the emerging Blockchain Technology and Cryptocurrency markets. He is in a constant learning process and motivates himself by sharing the knowledge he has acquired. In her spare time, she reads thriller novels and sometimes explores her culinary skills.
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