Shares in software firm MicroStrategy went up a few days ago after analysts suggested an $850 per share price in the coming future.
MicroStrategy Owes Its Success to Bitcoin
The figure has a lot to do with the idea that MicroStrategy is quite bullish on bitcoin, and that the firm is doing all it can to purchase the world’s number one digital currency by market cap. MicroStrategy initially bought its first round of BTC in August, when the currency was trading for around $12,000 per unit. It was one of the first institutional players to initiate such a buy, and it was also one of the first to declare its support for the asset publicly.
From there, the currency fell to a price of around $10,000 per unit, which at first, likely made everyone look at MicroStrategy with a questioning eye and wonder if perhaps the company had made a big mistake. However, the firm didn’t look at the situation in a negative light. Rather, it saw this as an opportunity to buy more BTC at a lesser price, which it did during the next few weeks. By the end of September 2020, the company had purchased more than $400 million worth of the digital currency.
Since then, the company has initiated more purchases and now owns close to $5 billion worth of BTC. In addition, the firm’s CEO Michael Saylor has gotten heavily involved in crypto promotion and is even pushing additional institutions to get involved. He has hosted summits talking about how largescale companies can take steps towards the world of crypto investments.
Either way, it doesn’t look like MicroStrategy is going to end its bullish attitude towards crypto anytime soon, particularly because bitcoin has brought it to new heights and really made it appear solid in the eyes of stock investors and shareholders.
Shares in the Company Are Likely Tied to BTC
Analysts at BTIG believe that bitcoin could potentially reach a whopping price of $95,000 per unit by the end of 2022. That means that within the next year and a half, bitcoin could add another $40,000 to its price, give or take. They also say that MicroStrategy is going to bounce up along with the currency given how much it has invested in BTC. They state:
We fully acknowledge that MSTR, which last August became the first publicly traded US company to adopt bitcoin as a treasury reserve asset, has taken a massive unhedged long position on a highly volatile speculative asset. As such, we believe who invests in the stock should do so understanding that their investment is highly correlated with the price of bitcoin.
Recently, shares in MicroStrategy were trading for about $700 each. That’s a price increase of just over three percent within a few short weeks.