MicroStrategy is back in the spotlight as its stock could explode 64% higher to hit $290. Analysts at Bernstein aren’t shy about this prediction because they believe Michael Saylor’s Bitcoin accumulation strategy is key. The company’s stash of 252,220 BTC, currently valued at $16 billion, continues to attract attention from both Wall Street and crypto heads.
Since MicroStrategy started its Bitcoin adventure in 2020, the firm’s stock has taken off. Bernstein noted that the stock has soared 13x, outperforming not just Bitcoin itself but Gold, the S&P 500, and other indices. But things get more interesting with their bullish take. The analysts threw out a wild prediction: Bitcoin will zoom to $1 million by 2033. And so, they see MicroStrategy’s stock riding high if Saylor keeps buying.
The Bitcoin Gamble that’s Shaking Markets
But here’s the kicker: it’s not all roses for MicroStrategy. While it holds more Bitcoin than most countries, the risks are real. The stock market isn’t always impressed with these bold moves. MicroStrategy still can’t join the S&P 500 because it hasn’t made enough profits, reporting a $102 million loss in Q2 2024.
Bernstein also laid out some caution. They see Bitcoin possibly rocketing to $200,000 by late next year, but then what? If Bitcoin’s upward momentum slows, MicroStrategy’s strategy could backfire. It could force the company to sell off Bitcoin to pay back debt, and nobody in crypto likes the thought of a forced sell-off.
Convertible Debt and the Big Bet
MicroStrategy’s financial gymnastics are another part of the story. It’s not just about Bitcoin hoarding but also how they raise cash. The company has taken on $4 billion in debt at just a 1% interest rate, thanks to their Bitcoin strategy. So far, this works, but only if Bitcoin keeps going up. And as we’ve seen before, when Bitcoin sneezes, the whole market catches a cold.
While Saylor’s plan has made waves, it’s still a high-stakes game. The analysts at Bernstein love the upside, but even they know Bitcoin is a wild ride with more twists than anyone can predict.
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