Bernstein Analysts Gautam Chhugani and Mahika Sapra recently revised their price targets for Bitcoin in their latest market report, which also sparked coverage of MicroStrategy. These analysts also outlined factors that they believe could contribute to BTC’s exponential price increase.
Bitcoin reaches $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 the flagship crypto 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 objectives and hinted at the institutional question for BTC as one of the reasons why they believe the flagship crypto can reach such heights.
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The research agency predicts that the Discover Bitcoin ETFs will continue to show impressive demand and that 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 to succumb to supply and demand dynamics, given that Bitcoin in circulation will drastically decrease as these Spot Bitcoin ETFs continue to accumulate a significant portion of the crypto token for their respective ETFs. Moreover, two Bitcoin halvings are expected to occur before 2033, which will decline further the supply of miners thus supporting their base case scenario BTC reaches $1 million.
MicroStrategy to benefit from BTC growth
These Berstein analysts also started reporting on MicroStrategy with an outperform rating. They predict that the software company’s shares could rise to $2,890 thanks to its exposure to BTC. A rise to $2,890 represents an upside of about 95% for MicroStrategy stock. currently rated around $1,500.
The research firm noted that MicroStrategy is committed to “building the largest Bitcoin company in the world.” This has already paid off so far, with Chhugani and Sapra stating that the software company has transformed from a “small software company to the largest BTC holding company” since August 2020 (when it started accumulating BTC).
MicroStrategy already owns it 1.1% of Bitcoin’s total supply, with assets worth approximately $14.5 billion. It is expected that the company’s BTC holdings will increase soon enough, as it has recently announced plans to offer $500 million in Convertible Senior Notes. A portion of the proceeds from the proposed sale will be used to purchase additional BTC.
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Berstein highlighted how the co-founder of the company Michael Saylor has become synonymous with the Bitcoin brand and that the company’s position as a leading Bitcoin company has helped attract “large-scale capital (both debt and equity) for an active Bitcoin acquisition strategy.” In dollar terms, Bernstein noted that MicroStrategy’s Bitcoin intrinsic value (NAV) per share has “nearly quadrupled, surpassing the 2.4x growth of Bitcoin’s spot price.”
“We believe that MSTR’s long-term convertible debt strategy gives the company sufficient time to capitalize on Bitcoin’s upside, with limited liquidation risk to Bitcoin on the balance sheet.” Chhugani and Sapra added.
Featured image created with Dall.E, chart from Tradingview.com