The price of Bitcoin could skyrocket this month, as could shares of MicroStrategy, which owns billions of dollars worth of BTC, a TD Cowen analyst said.
MicroStrategy is on pace to be “significantly higher” at the end of the year, Lance Vitanza said.
Bitcoin {{BTC}} has significant upside potential this month thanks to two big catalysts and Michael Saylor’s MicroStrategy (MSTR) stock could also rise, en route to “significant upside” by the end of year, says TD analyst Cowen. Vitanza said in a note Monday.
Last week, MicroStrategy reported a net operating loss of $53.1 million for the first quarter of 2024 after taking into account a digital asset impairment charge of $191.6 million. But the company did not adopt a new accounting standard for the fair value of digital assets that would have allowed it to profit significantly from bitcoin’s rise earlier this year.
Learn more: FASB’s Crypto Accounting Overhaul Could Attract More Business Investment, Michael Saylor and Others Say
Vitanza, who attended the MicroStrategy World 2024 user forum in Las Vegas last week, said, however, that customers have received significant positive feedback regarding the company’s existing software business, founded well before Saylor pushed the company to buy billions of dollars of bitcoins. “This causes us to rethink the upside potential of operating activities,” he wrote.
The company’s shares, up 89% year-to-date, could also see significant upside due to two main catalysts that could drive the price of bitcoin higher.
May 15 marks the deadline for institutional investment managers to file Form 13-F with the Securities and Exchange Commission. If it turns out that more companies bought the newly approved Bitcoin spot exchange-traded funds during the first quarter, it will show that Bitcoin has gained institutional acceptance, the analyst said.
Vitanza said another event that could be positive for Bitcoin and, therefore, MicroStrategy, would be the SEC’s likely rejection of an ether ETF, which many in the industry are preparing for.
“This is important because while the fate of Ethereum may remain up in the air until 2025 or longer, we believe there is a substantial amount of capital waiting for a digital winner to be declared; To the extent that Bitcoin proves to be this winner, the additional demand will likely be felt even more intensely given the recent Bitcoin halving,” Vitanza said.
Bitcoin is up 43% since the start of the year and hits a new all-time high above $73,000 in March, according to CoinDesk data. It is currently trading at $63,000.
