Bitcoin Halving to Boost MicroStrategy Stock, Predicts Berenberg Capital Markets
New York-based investment firm Berenberg Capital Markets has expressed a bullish outlook on MicroStrategy (MSTR), citing the upcoming Bitcoin (BTC) halving as a possible catalyst for increasing the value of its shares. Berenberg has given MicroStrategy a $430 price target based on its analysis.
MicroStrategy, founded by Michael Saylor, holds a significant amount of value in Bitcoin, with 152,333 Bitcoin in its possession as of June 28. The analysts at Berenberg believe that a rally caused by the Bitcoin halving could lead to a substantial increase in the price of MicroStrategy shares.
The Bitcoin halving, scheduled for April 26, 2024, will result in a 50% reduction in BTC issuance, slowing down the rate at which new Bitcoin enters the market. Berenberg suggests that based on historical patterns, a rally could begin approximately four months before the halving.
Previous Bitcoin halvings have seen the price of Bitcoin surge by a minimum of 682%. For instance, after the first Bitcoin halving on November 28, 2012, the price of Bitcoin increased from around $12 to a peak of $1,164 within 367 days.
While the supply of Bitcoin is predetermined, the demand for Bitcoin remains a crucial factor in determining the potential magnitude of a future rally. Berenberg points to the recent surge in spot Bitcoin ETF applications from major asset managers as evidence of increasing institutional adoption of Bitcoin.
The research report also mentions the pro-Bitcoin comments made by BlackRock CEO Larry Fink on July 5, where he expressed a strong belief in Bitcoin.
MicroStrategy shares are currently trading at $408, reflecting a nearly 180% gain since the beginning of 2023. In comparison, the price of Bitcoin has increased by 84% since the start of the year.
The research note was authored by equity analyst Mark Palmer, along with associates Matthew Laflash and Hassan Saleem.
Investors will be closely monitoring the Bitcoin halving and its potential impact on MicroStrategy and other Bitcoin-focused stocks. With expectations high, the market eagerly anticipates the price movement before and after the halving, as Bitcoin continues to gain attention from institutional investors.
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