BTIG began coverage of MicroStrategy, the business intelligence firm/bitcoin storehouse, with a "buy" rating Wednesday, saying the company's adoption of the cryptocurrency as its primary treasury reserve asset represents a "rational action" to protect the firm's value in the long run.

  • BTIG, which also praised MicroStrategy's core business, said that it views bitcoin as a form of digital gold and that buying MicroStrategy (Nasdaq: MSTR) provides investors a way to gain exposure to the virtual currency.
  • MicroStrategy's strategy lets it benefit from the rise of bitcoin driven by its adoption by institutional investors worried about inflation.
  • BTIG said its valuation is partly based on an assumption that the price of bitcoin will rise to $95,000 by the end of 2022 and on MicroStrategy's shift from a product license model to a cloud-first, subscription one.
  • MicroStrategy has reported owning 91,326 bitcoin it bought for $2.21 billion, BTIG noted, with that stash worth now more than $5 billion. Given that MicroStrategy shares are just over half where they had reached in early February, BTIG says the current price is an attractive entry point.
  • BTIG said it has an $850 per share price target on MicroStrategy's shares. No time frame was provided.
  • Shares of MicroStrategy closed Wednesday at $703.56, up $24.76 or 3.65%. On Feb. 8, they reached an all-time high of $1,315.

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