MicroStrategy Expands Bitcoin Holdings, Analysts Predict Reserves Could Reach 4% of Total Supply

By the end of 2033, MicroStrategy is expected to increase its bitcoin reserves from 1.7% to 4% of the total coin supply. This conclusion was reached by analysts at the brokerage firm Bernstein.

“In our view, MicroStrategy’s bitcoin treasury model is unprecedented for Wall Street,” the experts noted.

In light of the positive trend, the broker adjusted its forecast for MicroStrategy’s (MSTR) stock price from $290 to $600 by the end of the year. Experts pointed to factors influencing growth:

• the state of the bitcoin market;
• liquidity or insolvency risks for the company;
• its ability to scale capital in the long term.

Analysts believe bitcoin has entered a long-term bull cycle amid expectations of support from the new US government. Due to the nature of MicroStrategy’s debt obligations, risks to its balance sheet remain minimal despite bitcoin’s volatility. 

The company also exceeds its plan to raise $42 billion in capital over the next three years, having raised nearly $10 billion in the past month alone. 

According to Bernstein’s estimates, in the “base” scenario by the end of 2033, MicroStrategy will acquire 4% of bitcoin’s issuance — its reserves will amount to approximately 830,000 BTC at a price of $1 million.

Bloomberg Opinion columnist Lionel Laurent, on the other hand, considers the company’s bitcoin purchasing strategy unsustainable in the long term. In his view, a drop in the price of the first cryptocurrency by 50% or more poses a threat to MicroStrategy. 

BitMEX experts believe that liquidation of its cryptocurrency reserves will not occur as long as bitcoin’s price remains above $15,000.

MicroStrategy Buys More Bitcoin

On November 25, MicroStrategy founder Michael Saylor announced the purchase of an additional 55,500 BTC at a rate of ~$97,862.

MicroStrategy has acquired 55,500 BTC for ~$5.4 billion at ~$97,862 per #bitcoin and has achieved BTC Yield of 35.2% QTD and 59.3% YTD. As of 11/24/2024, we hodl 386,700 $BTC acquired for ~$21.9 billion at ~$56,761 per bitcoin. $MSTR https://t.co/79ExzXk4UM

— Michael Saylor⚡️ (@saylor) November 25, 2024

Currently, the company controls 386,700 BTC. The coins were purchased at an average price of $56,761, totaling approximately $21.9 billion.

According to Saylor, the yield on MicroStrategy’s bitcoin reserve has increased by 35.2% since the start of the quarter and by 59.3% since the start of the year.

At the time of writing, the company’s shares are trading at $440 in Nasdaq premarket. The firm’s market capitalization is $94.79 billion.

Since August 2020, when MicroStrategy adopted bitcoin as its primary reserve asset, its market capitalization has increased 50-fold.

Previously, Saylor stated his intention to transform the company into a bitcoin bank with a market value of $1 trillion.