Bernstein Analysts Gautam Chhugani and Mahika Sapra recently revised their price targets for Bitcoin in their latest market report, which also initiated coverage on Microstrategy. These analysts also described factors they believe could contribute to the exponential rise in BTC prices.
Bitcoin will reach $200,000 and then $1 million
Chhugani and Sapra predicted in the report that BTC will rise to a cycle high of $200,000 by 2025 and that the leading cryptocurrency will reach $1 million by 2033. Bernstein had. previously predicted that Bitcoin would reach $150,000 by 2025. However, these analysts have now revised their targets and alluded to the institutional demand to BTC as one of the reasons why they believe the leading crypto can reach such heights.
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The research firm predicts that the Spot Bitcoin ETFs will continue to see impressive demand and Bitcoin under management could reach $190 billion by 2025, a significant increase from the $60 billion in BTC that fund issuers already have under management.
In other words, these analysts expect BTC Price succumb to supply and demand dynamics considering that Bitcoin in circulation is expected to reduce drastically as these Spot Bitcoin ETFs continue to accumulate a significant amount of the cryptographic token for their respective ETFs. Furthermore, two Bitcoin halves are expected to occur before 2033, further reducing miners’ supply and thus supporting your basic case of BTC reaching $1 million.
MicroStrategy will benefit from BTC growth
These Berstein analysts also initiated coverage on Microstrategy with a superior performance rating. They predict the software company’s shares could rise to $2,890 thanks to its exposure to BTC. A rise to $2,890 represents about a 95% increase for MicroStrategy shares, which is currently rated for about $1,500.
The research firm noted that MicroStrategy has committed to “building the largest Bitcoin company in the world.” This has already borne fruit so far, with Chhugani and Sapra stating that the software company has gone from a “small software company to the largest BTC holding company” since August 2020 (when it started accumulating BTC).
MicroStrategy already has 1.1% of total Bitcoin supply, with stakes valued at around US$14.5 billion. The company’s BTC holdings are expected to increase soon as it recently announced plans to offer $500 million in convertible senior notes. Part of the proceeds from the proposed sale will be used to purchase additional BTC.
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Berstein highlighted how the company’s co-founder michael saylor has become synonymous with the Bitcoin brand and that the company’s position as a leading Bitcoin company has helped attract “scale capital (both debt and equity) into an asset Bitcoin Acquisition Strategy.” In dollar terms, Bernstein noted that MicroStrategy’s Bitcoin net asset value (NAV) per share “grew nearly fourfold, outpacing the 2.4x growth in Bitcoin’s spot price.”
“We believe MSTR’s long-term convertible debt strategy allows sufficient time to gain from Bitcoin upside, with limited liquidation risk for its Bitcoin on balance sheet.” Chhugani and Sapra added.
Featured image created with Dall.E, chart from Tradingview.com