MicroStrategy on Track to Own 4% of Bitcoin by 2033 as Bernstein Raises Stock Price Target to $600

Business intelligence firm MicroStrategy, led by Executive Chairman Michael Saylor, is poised to increase its Bitcoin holdings from the current 1.7% of the circulating supply to an impressive 4% over the next decade. This projection comes from analysts at research and brokerage firm Bernstein, who have also raised their price target for MicroStrategy (MSTR) to $600 by the end of 2025, a 42% upside from its recent price of $421.88.

In a note to clients on Monday, Bernstein’s Gautam Chhugani and team highlighted MicroStrategy’s unique approach to corporate treasury management, with Bitcoin as its core reserve asset. The analysts described this strategy as "unprecedented on Wall Street" and emphasized the company’s aggressive path to attract billions in capital to fund Bitcoin purchases. This bold move positions MicroStrategy as a central player in the growing institutional Bitcoin market.

A Record-Breaking Surge for MicroStrategy

Bernstein’s updated stock price target comes after MicroStrategy’s stock surged nearly 100% in the last month, gaining 509% year-to-date. On November 11, the stock hit its previous target of $290, which was set in June when MSTR was trading around $148. As of last Friday, the stock closed at $421.88, signaling strong momentum, with an additional 6% gain in pre-market trading, bringing the stock to $447.70.

MicroStrategy’s strategy of building its Bitcoin treasury is being closely watched by analysts, who cite three critical factors to the company's success:

• 1. The growing trend of investors taking long positions in Bitcoin.

• 2. The company’s ability to manage liquidity and avoid insolvency risks despite Bitcoin’s volatility.

• 3. The scalability of MicroStrategy’s capital-raising efforts over the long term.

A Sustained Bitcoin Bull Market

Bernstein analysts believe that Bitcoin is in the midst of a sustained bull market, fueled by favorable regulatory conditions and growing institutional adoption. The analysts also highlight the U.S. government’s support for Bitcoin, particularly under the incoming Trump administration, as a key catalyst for further growth. Additionally, macroeconomic factors such as low interest rates, inflation concerns, and high fiscal debt are seen as supportive of Bitcoin’s value proposition.

Despite Bitcoin’s volatility, MicroStrategy’s debt is structured as long-term, unsecured convertible debt, which minimizes risks to its balance sheet liquidity. Chhugani explained that, while nothing lasts forever, MicroStrategy’s current strategy of raising capital—including $3 billion in convertible debt and $6.6 billion in equity this month alone—puts it ahead of its $42 billion capital-raising goal, which is expected to be completed ahead of schedule within the next 18 months.

MicroStrategy's Bitcoin Holdings: A $830 Billion Opportunity

Looking ahead to 2033, Bernstein’s base-case scenario projects that MicroStrategy will control approximately 4% of Bitcoin’s circulating supply, or about 830,000 BTC, valued at $830 billion assuming Bitcoin reaches $1 million per coin. This would solidify MicroStrategy’s status as a key player in the global Bitcoin market, with its holdings potentially becoming one of the largest single-owner positions in the cryptocurrency.

A Sum-of-the-Parts Valuation

To estimate MicroStrategy's value, Bernstein employs a sum-of-the-parts approach, considering both the value of its software business and its Bitcoin holdings. The analysts apply a 2x enterprise value-to-sales multiple to the software business and add a premium for the company's Bitcoin holdings based on a discounted price forecast for 2033. The final price target for MSTR is set at $600 by the end of 2025, factoring in a 75% sustainable premium for the company’s Bitcoin exposure, alongside base, bull, and bear-case scenarios.

Mixed Reactions and Criticism

Despite Bernstein's optimistic outlook, not all analysts share the same enthusiasm. Citron Research, led by short-seller Andrew Left, recently downgraded its stance on MicroStrategy, arguing that the company’s massive stock run-up has become detached from Bitcoin’s underlying fundamentals. Citron maintains a short position on MSTR, despite being bullish on Bitcoin itself. They argue that MicroStrategy is trading at a 230% premium relative to its $32 billion Bitcoin holdings, which might indicate an overheated stock price.

However, Bernstein’s analysts counter that, during a Bitcoin bull market, the premium could remain higher than historical averages, allowing MicroStrategy to continue raising capital and acquiring more Bitcoin. This would potentially lead to even greater upside for the company’s stock price as Bitcoin’s value continues to rise.

MicroStrategy’s Role as a "Bitcoin Magnet"

Bernstein described MicroStrategy as a "Bitcoin magnet attracting Earth's capital reserves." The company recently made its largest Bitcoin acquisition to date, purchasing 51,780 BTC for approximately $4.6 billion between November 11 and November 17, at an average price of $88,627 per Bitcoin. This brings MicroStrategy’s total Bitcoin holdings to 331,200 BTC, purchased at an average price of $49,874 per coin, with a total cost of around $16.5 billion.

Saylor has previously stated that MicroStrategy’s ultimate goal is to reach a trillion-dollar valuation, positioning the company to become the leading "Bitcoin bank." The company’s strategy of using debt to fund Bitcoin acquisitions continues to draw attention as the broader crypto and institutional markets evolve.

Bitcoin’s Surge and MicroStrategy's Future

Bitcoin’s recent rally, trading at $98,629 according to The Block’s Bitcoin Price Page, has only bolstered the confidence of investors and analysts alike. The cryptocurrency has gained 133% year-to-date and 7.4% over the past week. As Bitcoin’s value rises, MicroStrategy’s Bitcoin holdings become increasingly valuable, strengthening the company’s position in the tech and finance sectors.

With Bitcoin’s continued growth and MicroStrategy’s aggressive capital-raising plans, the company is on track to become a dominant force in the cryptocurrency world, with its holdings potentially reaching 4% of Bitcoin’s circulating supply by 2033. Whether or not the stock continues its meteoric rise will depend on the performance of both Bitcoin and MicroStrategy’s ability to execute its ambitious plans. However, Bernstein’s updated price target of $600 indicates that the market sees significant potential in MicroStrategy’s Bitcoin-driven strategy.