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The price of Bitcoin could rise sharply this month, and the same could be said for shares of MicroStrategy, which owns billions of dollars worth of BTC, a TD Cowen analyst said.
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According to Lance Vitanza, MicroStrategy is expected to be “significantly higher” at the end of the year.
Bitcoin {{BTC}} has significant upside potential this month thanks to two big catalysts, and Michael Saylor’s MicroStrategy (MSTR) stock could also rise sharply on its way to a “meaningful increase” by year-end, according to TD Cowen- analyst Lance Vitza said in a note on Monday.
Last week, MicroStrategy reported a net operating loss of $53.1 million for the first quarter of 2024 after recording a digital asset impairment charge of $191.6 million. But the company has not adopted a new standard for accounting for the fair value of digital assets, which would have given it a sizable profit from the Bitcoin rally earlier this year.
Read more: Michael Saylor and others argue that the FASB’s crypto accounting shift could lead to more corporate investment
However, Vitanza, who attended MicroStrategy’s World 2024 user forum in Las Vegas last week, said customers had received significantly positive feedback on the company’s legacy software business, which was founded long before Saylor led the company to buy Bitcoin in Billions of euros were pressing. “This causes us to reconsider the potential upside in operations,” he wrote.
The company’s stock, which is up 89% year-to-date, could also see a significant upside due to two main catalysts that could push the price of Bitcoin higher.
May 15 marks the deadline for institutional investment managers to file Form 13-F with the Securities and Exchange Commission. If it turns out that more companies bought the newly approved spot Bitcoin exchange-traded funds in the first quarter, it will show that Bitcoin has gained further institutional acceptance, the analyst said.
Vitanza said another event that could have a positive impact on Bitcoin, and therefore MicroStrategy, is the SEC’s likely rejection of an Ether ETF that many in the industry are in favor of.
“This is significant because even if the fate of Ethereum remains uncertain until 2025 or longer, we believe there is a significant amount of capital waiting for a digital winner to be announced; “To the extent that Bitcoin proves to be this winner, the increasing demand will likely be felt even more acutely given the recent Bitcoin halving,” Vitanza said.
Bitcoin is up 43% year-to-date and hit a new all-time high of over $73,000 in March, according to data from CoinDesk. It is currently trading at $63,000.