The forthcoming Bitcoin halving event is expected to bring a new wave of momentum to Bitcoin-focused stocks, particularly MicroStrategy, the technology firm founded by Michael Saylor.
Berenberg Capital Markets, a New York-based investment firm, has expressed its optimistic outlook on MicroStrategy in a research note shared with Cointelegraph, setting a price target of $430 for the company.
Berenberg analysts believe that the majority of MicroStrategy’s value lies in the 152,333 Bitcoin it currently holds.
They suggest that a Bitcoin halving rally could result in a significant increase in the price of MicroStrategy shares.
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The Bitcoin halving, scheduled for April 26, 2024, reduces the issuance rate of BTC by 50%, thereby slowing down the rate at which new Bitcoin enters the crypto market.
The research note states that based on historical patterns, Bitcoin’s price tends to rally before and after each halving event.
The analysts predict that the pre-halving rally for the fourth halving could begin around four months from now.
Previous halving cycles have seen Bitcoin’s price surge by at least 682%. For instance, during the first halving on November 28, 2012, Bitcoin was valued at around $12, but 367 days later, it reached a peak of $1,164.
While Bitcoin’s supply follows a predetermined path, gauging the overall demand for Bitcoin is crucial in predicting the potential magnitude of a future rally.
To assess this, the research note points to the recent surge in spot Bitcoin ETF applications from major asset managers, indicating an increasing institutional adoption of Bitcoin.
Additionally, the note highlights the pro-Bitcoin statements made by BlackRock CEO Larry Fink on July 5, suggesting growing conviction in Bitcoin.
The research report was authored by equity analyst Mark Palmer, along with associates Matthew Laflash and Hassan Saleem.
Currently, MicroStrategy shares are trading at $408, marking a nearly 180% gain since the beginning of 2023. Meanwhile, the price of Bitcoin has risen by 84% since the start of the year.
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