Bitcoin Proxy Stock Receives Price Target Hike with 40% Upside Potential
MicroStrategy, a company known for its position in the bitcoin market, may be poised for more growth in the coming months, as reported by analysts at Bernstein. Analyst Gautam Chhugani, who holds a positive outlook on the stock, has increased his price target to $600 from $290, indicating a potential 42.2% increase from the previous closing price. This move comes on the heels of a stellar year for the company, with shares increasing by about 568% in 2024 and more than 181% in the past three months.
Bitcoin’s recent rally toward $100,000 has been a driving force behind the stock’s performance. Chhugani believes that Bitcoin is in a structural bull market supported by conducive regulations, U.S. government backing, institutional adoption, and favorable macroeconomic conditions such as low interest rates, inflation risks, and record fiscal debt. He also points out that MicroStrategy’s debt structure is secure, with long-term, unsecured convertible debt that minimizes the impact of Bitcoin price volatility on the company’s balance sheet.
MicroStrategy has been accumulating a significant amount of Bitcoin over time, making the company a popular choice for investors seeking exposure to the cryptocurrency market. Currently, MicroStrategy holds approximately 1.7% of the global Bitcoin supply, but Chhugani predicts that this figure could grow to 4% by 2033. This unique approach of treating Bitcoin as a treasury asset sets MicroStrategy apart on Wall Street, according to the analyst, positioning the company to attract substantial capital for Bitcoin investments on a global scale.
Following Chhugani’s optimistic assessment, MicroStrategy’s stock saw a premarket increase of more than 7%. Despite varying opinions among analysts, with all nine covering analysts giving a buy or strong buy rating, the average target price of $326.29 suggests a potential downside of more than 22% ahead.
