The nearing Bitcoin halving is expected to give Bitcoin-focused companies like Michael Saylor-founded MicroStrategy a boost.
Berenberg Capital Markets, a New York-based investing company, revealed its explanations for a strong perspective on MicroStrategy in a research report provided by Cointelegraph. Berenberg has a $430 price objective on the stock.
Based on the analysts, MicroStrategy draws the majority of its worth from the 152,333 Bitcoin it holds on its books as of June 28. The approaching halving and after boom might result in huge rises in prices for its shares.
About Bitcoin Halving and its Impact on MicroStrategy
The BTC halving, set for April 26, 2024, cuts the production of each BTC by 50%, drastically slowing the pace at which new Bitcoin reaches the market for digital currencies.
According to Berenberg Capital Markets report, “If the previous trend formed by the first three halvings remains to hold up with the fourth halving, then the pre-halving boom will start about four months from now.”
As the report points out, past halving cycles have resulted in a minimum price increase of 682% for Bitcoin. The value of Bitcoin was about $12 at the time of the first halving on November 28, 2012.
Its value soared to $1,164 after 367 days. While Bitcoin’s availability follows a “predetermined path,” the researchers stated that the entire demand for Bitcoin must be assessed before anybody can anticipate the “expected magnitude” of an upcoming rise.
The investigation used the present jump in spot Bitcoin ETF filings from some of the world’s “largest and most-profile” asset managers to demonstrate that organizational usage of Bitcoin is increasing.
The investor notification also called to recognize BlackRock CEO Larry Fink’s pro-Bitcoin statements on July 5, in which he seemed like “a high-conviction Bitcoin maximalist.”
Equity analyst Mark Palmer collaborated on the findings from the research with companions Matthew Laflash and Hassan Saleem.
MicroStrategy stock is presently trading at $408, up roughly 180% since the beginning of 2023, based on TradingView data. In the meantime, the price of Bitcoin has risen by 84% since the beginning of the year.
Bitcoin and Microstrategy Stock Correlation
Based on the analysis point out, there is an important relationship between the stock price of Microstrategy and the price of Bitcoin, which is assessed to be about 0.90. If the fourth Bitcoin halving results in a big increase in the value of the cryptocurrency, Microstrategy’s stock is likely to promptly follow behind.
The outlook is based on the favorable view of Bitcoin’s post-halving efficiency, which contributes to the expectation of an eventual increase in the stock price of Microstrategy.
Following the publication of Berenberg’s research note, Microstrategy’s stock, denoted by the ticker code MSTR, has already increased by 7% in the last day. The stock, which was selling below its present price level just a month ago, is now worth $407.
The favorable market reaction shows the market’s confidence about the possible impact of the impending halving event on Microstrategy’s performance. It is also worth mentioning that the notion of halving has been linked to important market moves in the past. And investors are keeping a careful eye on these occurrences for possible possibilities.
The decrease in new coin releases, along with market demand, has traditionally led to the price of Bitcoin rising. As a result, the impending halving has prompted curiosity and conjecture among market players.
Berenberg’s study adds to the idea that the halving event may have a positive influence on Bitcoin’s price. As a result, firms like Microstrategy, which has a significant amount of Bitcoin on its financial sheet, have endured losses.
What Can the Overall Crypto Market Expect from Bitcoin Halving?
If we widen our views, we can see that if Bitcoin breaks over the previous ATH of $69,000 in the following bull run, MSTR may easily rebound to $1300, representing a 320% rise from current levels.
MicroStrategy’s stock price movement closely mirrors the price movements of BTC, the most valuable cryptocurrency by market value because, as previously stated, the majority of the company’s balance sheet is expressed in BTC.
MSTR’s next price objectives are $450 and then $600, with greater levels that are unlikely to be obtained before Bitcoin’s halving. In any event, MicroStrategy isn’t the only potential firm doing well in the stock market: equities like Apple, Microsoft, Nvidia, Tesla, and The Trade Desk are swiftly regaining all of the value they lost during the 2022 price crash.
The Bitcoin halving is expected a lot to change the crypto market. Within four months, you can expect the beginning of a bull run and it will give dramatic profits to all investors. Companies like MicroStrategy which has big Bitcoin investments are expected to grow in the coming years.