- MicroStrategy share price has soared to the highest point in over two years.
- The company is essentially a Bitcoin corporation with over 174k in holdings.
- The weekly chart shows that the shares have a 45% upside.
MicroStrategy (NASDAQ: MSTR) stock price had a strong performance in November as its crypto holdings thrived. The shares surged to a high of $535, much higher than the year-to-date low of $132.15. This jump makes it one of the best-performing stocks in Wall Street.
Who needs a Bitcoin ETF?
MicroStrategy has grown to become the biggest holder of Bitcoin in the world. The company continued it BTC accumulation in November as it bought 16,130 new Bitcoins worth over $608 million.
This brings the total number of Bitcoins in its holdings to over 174,530. Based on the current prices, MicroStrategy’s Bitcoin holdings are worth over $6.6 billion. This is a big number considering that the company has a market cap of over $7.3 billion. It has an enterprise value of $9.5 billion.
This means that most of MicroStrategy’s value comes from its Bitcoin holdings instead of its technology platform. Therefore, some analysts believe that buying MSTR stock is a better option to invest in Bitcoin compared to the ProShares Bitcoin Strategy ETF (BITO), which has an expense ratio of 0.95%.
MicroStrategy stock price is highly intertwined with the performance of Bitcoin because of the vast coins it owns. Therefore, the shares will likely continue doing well in the coming months for several reasons.
First, Bitcoin is getting rare as the amount of coins in exchanges remain at the lowest level in years. Second, over 19.5 million Bitcoins of the total 21 million have already been mined. Over 4 million of these coins are lost forever.
Most notably, Bitcoin supply from miners is expected to drop in the coming months as it activates halving. Halving is a situation where Bitcoin rewards are reduced by half.
At the same time, Bitcoin is expected to see elevated demand from Wall Street firms like Blackrock, Franklin Templeton, and Invesco. A combination of high demand and low supplies is a positive thing for Bitcoin,
Also, analysts expect that the Federal Reserve will start cutting interest rates in the coming months. Futures data show that cuts will start in the first half of the year. In most cases, Bitcoin does well when the Fed is slashing rates.
The other potential short-term catalyst for the MSTR price is the Santa Claus rally. In most cases, stocks tend to rally towards Christmas.
MicroStrategy stock price forecast
The weekly chart shows that the MSTR stock price has been in a strong uptrend as it now sits at the highest point in two years. It has recently crossed the important resistance point at $473.97, the highest point on June 10th. The shares are also hovering at the highest swing in March 2022.
MicroStrategy stock price has also risen above the 50-day and 100-day Exponential Moving Averages (EMA). It is also nearing the 61.8% Fibonacci Retracement level. The Stochastic Momentum Oscillator has moved to above 40.
Therefore, the outlook for the stock is bullish, with the next point to watch being at $715, the 50% retracement point. This price is about 45% above the current level.
Contributors
