TD Cowen Projects Bitcoin At $155K By Year-End, Raises Strategy’s Price Target

[Ben Graham]

Global investment bank TD Cowen has recently revised its price target for Strategy’s (previously MicroStrategy) stock, MSTR, raising it from $590 to $680 per share and a bullish prediction for Bitcoin (BTC) prices, which could soar to $155,000 by December. 

Possible 53% Drop For Bitcoin

The firm’s study outlines a base-case scenario for Bitcoin at $128,000 by year-end, with a more pessimistic outlook placing it as low as $55,000, which could mean a major 53% crash from current prices. 

TD Cowen analysts assert that a significant increase in Bitcoin prices is expected to positively impact Strategy’s share price, given its status as the world’s largest corporate holder of Bitcoin.

On July 14, Strategy purchased an additional 4,225 BTC for $472.5 million, averaging $111,827 per coin. This latest acquisition brings the company’s total Bitcoin holdings to an impressive 601,550 BTC. 

Analysts at TD Cowen noted that what began as a defensive measure to preserve the value of its assets has evolved into a proactive strategy aimed at enhancing shareholder value. 

Strategy plans to continue acquiring Bitcoin through proceeds from upcoming debt and equity offerings. The firm anticipates that Strategy will raise around $84 billion through its innovative “42/42” plan, which involves an equal mix of debt and equity, potentially increasing its Bitcoin reserves to 900,000 BTC by the end of 2027. 

Strategy As Strong Investment Option

TD Cowen has initiated buy ratings on Strategy’s preferred shares, emphasizing their attractive income potential and price appreciation, which are expected to be less volatile than common shares or Bitcoin itself. 

This endorsement comes after the firm first recognized Strategy’s Bitcoin strategy in 2023, describing it as a “paradigm shift.” At that time, they highlighted the company’s approach of utilizing cash from its software business to invest in Bitcoin as a long-term hedge against dollar inflation. 

Analysts believe that Bitcoin’s finite supply makes it a more reliable store of value compared to traditional currencies or gold, presenting Strategy as an appealing option for investors looking to gain Bitcoin exposure.

As institutional adoption of cryptocurrencies accelerates, Strategy’s acquisition strategy has become a blueprint for other corporate treasuries. 

The company’s total investment in Bitcoin now stands at $29.27 billion, yielding substantial unrealized gains with a cost basis of $71,268 per BTC. 

The latest report and Strategy’s recent purchase coincided with Bitcoin hitting a new all-time high, surpassing $123,000, underscoring the growing acceptance and adoption of BTC in the financial landscape.

Nevertheless, the cryptocurrency has retraced to $117,000 in an attempt to find its next support level before moving on to uncharted territory once again if buying demand persists among investors.

Featured image from DALL-E, chart from TradingView.com