MicroStrategy continues to buy Bitcoin, stock price rises 9.4% in one day

Author: Tom Mitchelhill, CoinTelegraph; Compiled by: Deng Tong, Golden Finance

Investment banker Benchmark said that MicroStrategy’s stock is worth a “buy” with a target price of $990 because it Software companies that buy Bitcoin are poised to reap huge gains from institutional demand and April’s halving event.

Benchmark senior analyst Mark Palmer wrote in a research note on February 27 that MicroStrategy (MSTR) provides investors with a "preparation for the upcoming Bitcoin halving." Invest in time”. The company’s Bitcoin holdings have grown to more than $11 billion.

“Our price target for MSTR is based on our assumption thatBitcoin’s price will reach $125,000 by the end of 2025.”

Palmer Prediction MicroStrategy shares will also be boosted by increased demand for Bitcoin spurred by the launch of a new spot Bitcoin exchange-traded fund (ETF) in the United States.

On February 26, the top ten U.S. Bitcoin ETFs (excluding Grayscale’s GBTC) witnessed net inflows of $519 million, and have now generated a total of more than $6 billion since going online on January 11 net inflow.

Since its launch, the spot Bitcoin ETF has attracted more than $6 billion in net inflows. Source: Farside Investors

Additionally, Palmer cited the upcoming Bitcoin halving, currently expected to occur on April 20, as further reason to predict MicroStrategy price increases.

Bitcoin halving means that miners’ rewards are cut in half. This reduces the future supply of new Bitcoins on the market and is widely viewed by crypto market experts as a bullish long-term catalyst.

He pointed out that when Bitcoin was halved for the first time in 2012, its price rose from about $12 to nearly $1,000, and after the halving in July 2016, Bitcoin continued to rise over the next month. It rose from $650 to $2,250 during the year.

MicroStrategy uses a "leverage strategy" - a strategy that uses debt financing and stock sales to pay for its Bitcoin store at no extra charge - to increase its direct investment in Bitcoin, Palmer believes this strategy will be beneficial to the company if it continues.

On February 26, MicroStrategy purchased an additional 3,000 Bitcoins, bringing its total holdings to 193,000 Bitcoins—currently worth just over $11 billion.

MicroStrategy shares are currently trading at $871, up 9.4% on the day, according to TradingView.

MicroStrategy's shares are up 230% in the past 12 months. Source: TradingView

Meanwhile, Bitcoin changed hands at $57,083, up 9.2% last week, in large part due to strong institutional demand for the cryptocurrency.