$MicroStrategy (MSTR.US)$ The stock price may continue its staggering upward trend, thanks to its unprecedented bitcoin strategy.

This is the view mentioned in the report to clients by Bernstein analysts this week. So far this year, MicroStrategy's stock price has soared nearly 500%, about 2.7 times the increase in Nvidia during the same period. Bernstein analyst Gautam Chhugani believes that MicroStrategy's upward momentum may further expand. He has raised MicroStrategy's target price from $290 to $600, indicating a 49% potential increase compared to the current level.

Chhugani stated that "MicroStrategy's bitcoin asset reserve model is unprecedented on Wall Street," and he also mentioned that the company is a "bitcoin magnet" for institutional investors.

The software company led by Michael Saylor currently holds 386,700 bitcoins, accounting for approximately 1.8% of the total supply of about 21 million coins.

According to Chhugani's forecast, by the end of 2033, MicroStrategy may hold 4% of the total bitcoin supply, as it will continue to raise funds through attractive financing conditions to purchase more bitcoins. Based on Bernstein's target price of $1 million per bitcoin, the value of these bitcoins will eventually be equivalent to about 4% of the total supply.

Chhugani mentioned, "The bitcoin bull market will mean that MicroStrategy's premium may be higher than historical averages, allowing the company to issue more debt or equity to purchase more bitcoins."

Currently, MicroStrategy's market cap is close to $100 billion, nearly 200% higher than its $36 billion bitcoin assets.

Chhugani is bullish on MicroStrategy for a key reason, as the company was the first in the corporate world to include cryptos in its balance sheet. This strategy began in August 2020, allowing MicroStrategy to raise a large amount of funds to buy more bitcoin.

The company announced in October this year a plan to raise $42 billion through debt and equity sales over the next two years to purchase bitcoin. Since the announcement, the company has raised $9 billion, with Chhugani believing they are ahead in progress and expects to complete the remaining $33 billion financing goal within 18 months. Afterward, Barclays also raised its target price from $275 to $515 and maintained a shareholding rating on the stock.

However, MicroStrategy's call logic ultimately depends on the continued rise in the price of bitcoin, which Chhugani believes is highly likely. Analysts predict that the price of bitcoin may reach $0.2 million at the peak of the cycle in 2025, $0.5 million in 2029, and surpass $1 million in 2033. Chhugani stated,

"Bitcoin is in a structural bull market, benefiting from favorable regulatory environment, support from the USA government, institutional adoption, and favorable macroeconomic conditions (low interest rates, inflation risks, and record fiscal deficits)."

Editor/rice