MicroStrategy’s Rally Expected to Persist as Bitcoin Halving Approaches: Benchmark Analysts

• MicroStrategy’s price target was raised from $990 at Benchmark to $1,875.

• The software company is well-positioned to benefit from the upcoming bitcoin halving, the report said.

• The broker raised its Bitcoin price prediction for the end of 2025 to $150,000.

MicroStrategy (MSTR) is uniquely positioned to benefit from the bitcoin {{BTC}} halving expected to occur around April 20, when the new cryptocurrency supply will be reduced by 50%, the broker said Monday Benchmark in a research report.

“We note that the three previous bitcoin halvings, in 2012, 2016, and 2020, saw explosive bitcoin price appreciation occur only after the halving,” wrote analyst Mark Palmer. THE halving over four years this is when miner rewards are reduced, slowing the rate of growth of the bitcoin supply.

Benchmark raised its MicroStrategy price target from $990 to $1,875 while maintaining its Buy rating. The new price target is based on the assumption that bitcoin will reach $150,000 by the end of 2025, up from $125,000. MicroStrategy shares rose more than 11% to around $1,601 in trading before U.S. markets officially opened.

“Although the upcoming Bitcoin halving will create a supply shock like previous ones, we believe the impact of the event could be amplified by the simultaneous demand shock created by the emergence of exchange-traded funds (Bitcoin spot ETF),” Palmer wrote, adding that “we expect flows into spot Bitcoin ETFs to increase significantly once institutions begin to seriously invest in them.”

MicroStrategy has a unique business model based on acquiring and holding Bitcoin. The company is expected to continue to enrich its bitcoin reserve using proceeds from capital markets transactions and excess cash generated from its enterprise software business, the report said.

Benchmark estimates that the company will hold 298,246 bitcoins by the end of 2025, up from 214,246 coins as of March 19.

Rival broker BTIG said the software developer’s implied premium over Bitcoin is supported by investors who want exposure to digital assets but might not be able to invest directly in cryptocurrency or ETFs , and also supported by the company’s ability to accretively raise capital to purchase additional BTC. he wrote in a report Friday.

Learn more: MicroStrategy’s implied premium on Bitcoin settles into a new norm, according to BTIG