The upcoming Bitcoin halving will bring fresh air to Bitcoin-focused stocks like MicroStrategy, the tech firm founded by Michael Saylor.
In a research note shared with Cointelegraph, New York-based investment firm Berenberg Capital Markets explained its bullish outlook on MicroStrategy (MSTR), with Berenberg giving it a $430 price target.
Much of MicroStrategy’s value comes from the 152,333 bitcoins it held on its books as of June 28, the analyst said, adding that a rally from bitcoin’s halving could lead to a sharp rise in its stock price.
“We expect Bitcoin’s price to repeat its historical pattern of rising before and after each Bitcoin halving.”
The Bitcoin halving, scheduled for April 26, 2024, will reduce the BTC issuance rate by 50%, significantly slowing the rate at which new Bitcoin enters the crypto market.
Final Bitcoin ETF Decision Deadline: 3/19/24
Bitcoin Halving Expected: 4/16/24
— Will Clemente (@WCclementeIII) July 10, 2023
“If the historical patterns established by the previous three Bitcoin halvings continue to play out in the fourth halving, the pre-halving rally will start about four months later,” the report reads.
As Berenberg highlighted, the price of Bitcoin has surged by at least 682% during previous halving cycles. On November 28, 2012, when Bitcoin halved for the first time, the price of Bitcoin was hovering around $12.
After 367 days, its price peaked at $1,164.
The analyst noted that while Bitcoin’s supply follows a “predetermined path,” the overall demand for Bitcoin needs to be gauged before anyone can predict the “potential magnitude” of a future rally.
To measure this, the study sees a recent surge in spot bitcoin ETF applications from some of the world’s “largest and most recognizable” asset managers as evidence that institutional adoption of bitcoin is on the rise.
The investor note also drew attention to BlackRock CEO Larry Fink’s pro-Bitcoin comments on July 5, which sounded like “a staunch bitcoiner.” currency extremists”.
related: Standard Chartered Bank: Bitcoin supply shock will send BTC price to $120,000
The research note was written by equity analyst Mark Palmer and colleagues Matthew Laflash and Hassan Saleem.
MicroStrategy shares are currently trading at $408, up nearly 180% since the start of 2023, according to the data. data from transaction view. Meanwhile, the price of bitcoin has risen 84% since the start of the year.
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