MicroStrategy receives buy rating and price target of $990 in Benchmark report
Quick Take
- Benchmark has initiated coverage of MicroStrategy with a buy rating and price target of $990.
- The price target is based on a projection that bitcoin will reach $125,000 by year-end 2025.
Boutique investment banking firm Benchmark initiated coverage of MicroStrategy, publishing a research report Tuesday with a buy rating and a share price target of $990.
The forecast is based on a projected year-end 2025 valuation of the company's bitcoin holdings and an estimated year-end 2025 value of its business intelligence software activities. In its price projection, Benchmark posited that the approval of multiple spot bitcoin ETFs and the upcoming halving could act as tailwinds for the bitcoin price.
"Our price target for MicroStrategy is based on our assumption that the price of bitcoin will reach $125,000 at the end of 2025, and that move would be driven by increased demand resulting from the SEC’s approval in January of spot bitcoin ETFs in the U.S., and the impact of the fourth bitcoin halving, set to occur in late April," Benchmark Senior Equity Research Analyst Mark Palmer said in the report.
"The reduced pace of supply resulting from the halving has the potential to drive the price of the cryptocurrency meaningfully higher during the next couple of years," added Palmer.
MicroStrategy's share price now stands at $860.75, increasing by over 8% in early trading on Tuesday.
The bitcoin halving
The next bitcoin halving will likely occur in April of this year, and the event will reduce the reward that miners receive for validating and adding new blocks to the blockchain by 50%.
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The halving occurs after every 210,000 blocks are mined, which takes roughly four years to do. The last halving occurred in 2020, when the block reward was reduced from 12.5 bitcoin to 6.25 bitcoin.
With the next halving the block reward will again drop from the current 6.25 
BTC
-1.34%
to 3.125 BTC per block. This mechanism is programmed into the bitcoin protocol and is intended to control the supply of new bitcoins, making it more scarce over time.
The world's largest cryptocurrency by market capitalization decreased by over 9% in the past 24 hours to $57,210 at 10:34 p.m. ET, according to The Block's Price Page.
The GM 30 Index, representing a selection of the top 30 cryptocurrencies, has increased by 4.44% to 122.45 in the past 24 hours.
The price of bitcoin has increased by over 9% in the past 24 hours. Image: The Block.
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