Michael Saylor’s Strategy has announced aggressive plans to up its Bitcoin acquisitions, and two Wall Street firms are on board.
Michael Saylor’s risky bet on Bitcoin (BTC) received a green light from top Wall Street analysts. According to a Friday, May 2 report by Coinbase, analysts from Wall Street research firms Benchmark and TD Cowen endorsed Strategy’s aggressive Bitcoin acquisitions.
Mark Palmer, analyst at the research and investment banking firm Benchmark, noted Strategy’s first-mover advantage. He explained that the firm has managed to grow its Bitcoin holdings substantially, projecting a $650 price target from Strategy’s current $395 price.
Wall Street analysts share bullish targets for Strategy
“While the number of companies that have sought to replicate Strategy’s bitcoin acquisition strategy has continued to grow rapidly … MSTR yesterday issued a reminder of the extent of its first-mover advantage and how its ability to accelerate its accumulation of bitcoin has continued to increase as its platform has scaled,” Mark Palmer, Benchmark.
Strategy’s CEO, Michael Saylor, recently announced the firm’s plans to use both common stock and debt to substantially increase its Bitcoin holdings. The plan would help the company raise $84 billion, split equally between debt and stock offerings.
While the plans are ambitious, TD Cowen analyst Lance Vitanza stated that it is not out of the question. Strategy’s current market cap of $111 billion boosts the credibility of the raise. Vitanza also shared his price target of $550.
Strategy currently holds 553,555 Bitcoins, representing about 2.5% of the total supply. While the company’s performance has been strong, often outperforming Bitcoin itself, its highly leveraged position is not without risk.
While Bitcoin remains stable, Strategy can reap significant gains for investors. However, a substantial drop in BTC price would make the company’s debt unsustainable. What is worse, if Strategy were forced to sell some of its BTC to pay off its debts, it could have a cascading effect on the Bitcoin markets.