Bitcoin Could Hit $1M Within 10 Years, Bernstein Says as It Initiates Coverage of MicroStrategy

The broker assigned the software company an outperform rating and a $2,890 price target.

AccessTimeIconJun 14, 2024 at 8:42 a.m. UTC
Updated Jun 14, 2024 at 8:45 a.m. UTC
  • The bitcoin price could hit $1 million by 2033 and is likely to reach a $200,000 cycle-high by 2025.
  • MicroStrategy initiated as outperform with a $2,890 price target at Bernstein.
  • The software company's long-term convertible debt strategy means it has time to benefit from bitcoin upside with limited liquidation risk to the crypto on its balance sheet, the report said.

The price of bitcoin (BTC) is likely to hit $1 million by 2033 and reach a cycle-high of $200,000 by 2025, Bernstein said as it initiated coverage of software developer MicroStrategy, the biggest corporate owner of the largest cryptocurrency, with an outperform rating.

MicroStrategy now owns 1.1% of the global supply of the world’s largest cryptocurrency, worth about $14.5 billion, having transformed itself from a small software company in the space of four years, the broker said in a research report on Thursday.

Bernstein initiated coverage of the Tysons Corner, Virginia-based company with a $2,890 price target. The shares closed at around $1,484 on Thursday. The Nasdaq-listed firm currently holds 214,400 bitcoin. It began buying the cryptocurrency in 2020, adopting it as a reserve asset.

The company’s founder and chairman, Michael Saylor, “has become synonymous with brand bitcoin and has positioned MSTR as a leading bitcoin company, attracting at-scale capital (both debt and equity) for an active bitcoin acquisition strategy,” analysts Gautam Chhugani and Mahika Sapra wrote.

Microstrategy positions itself as an “active leveraged bitcoin strategy versus passive spot exchange-traded funds (ETFs),” the report said, noting that over the last four years the company’s active strategy has produced a higher bitcoin per equity share.

The broker's BTC price forecast is driven by the unprecedented demand from spot exchange-traded funds (ETFs) and because supply of the cryptocurrency is constrained. Bernstein now estimates that bitcoin could reach $500,000 by 2029. The 2025 estimate was raised from $150,000.

MicroStrategy’s long-term convertible debt strategy means it has enough time to benefit from potential bitcoin upside with limited liquidation risk to the cryptocurrency on its balance sheet, the report added.

The company yesterday proposed a $500 million debt sale of convertible notes to boost its bitcoin stash.

Edited by Sheldon Reback.

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Will Canny is CoinDesk's finance reporter.