The surge in Bitcoin’s price over the past year has not only captured the attention of retail investors but also reshaped the valuations of companies with significant crypto holdings. Among them, MicroStrategy has emerged as a standout performer—transforming from a relatively obscure business intelligence software firm into one of the most closely watched Bitcoin proxy stocks on Wall Street.
According to a recent analysis by BTIG, a leading investment research and trading firm, MicroStrategy’s stock still has room to grow—potentially by another 20%—driven largely by bullish expectations for Bitcoin’s price trajectory.
Why Wall Street Is Bullish on MicroStrategy
BTIG’s director and financial technology analyst, Mark Palmer, initiated coverage on MicroStrategy with a “Buy” rating and set a price target of $850 per share, representing more than a 20% upside from current levels. This comes despite the stock trading nearly 48% below its February 2024 peak.
Palmer believes now is an attractive entry point for investors who understand the unique risk-reward profile of the company.
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Bitcoin as Digital Gold: A Core Investment Thesis
At the heart of BTIG’s valuation is a strong conviction in Bitcoin’s long-term potential. Palmer forecasts that Bitcoin could reach $95,000 by the end of 2025, driven by macroeconomic trends such as unprecedented fiscal stimulus, rising inflation concerns, and growing skepticism toward fiat currencies.
He describes Bitcoin as a compelling non-sovereign store of value—a modern-day “digital gold.” In times of monetary uncertainty, assets uncorrelated with traditional financial systems gain appeal. Bitcoin, despite its volatility, fits this narrative.
“We fully acknowledge that MicroStrategy has built a large, unhedged long position in this highly volatile and speculative asset,” Palmer noted. “But for investors comfortable with that exposure, the potential rewards are substantial.”
This perspective aligns with the strategic vision of MicroStrategy’s longtime CEO, Michael Saylor, who has aggressively shifted the company’s treasury reserves from U.S. Treasuries to Bitcoin since 2020.
MicroStrategy’s Bitcoin Holdings: A Deep Dive
Founded in 1989, MicroStrategy began as a provider of enterprise analytics and mobile software solutions. However, its identity has dramatically evolved in recent years due to its bold Bitcoin adoption strategy.
As of the latest estimates from BTIG, MicroStrategy holds approximately 91,326 bitcoins, acquired at an average price of $24,214 per BTC.
With Bitcoin trading around $59,000** at the time of analysis, the company’s crypto holdings are now worth roughly **$5.4 billion—accounting for nearly 80% of its market capitalization of $6.84 billion.
This deep integration between corporate value and Bitcoin performance makes MicroStrategy one of the purest ways to gain indirect exposure to cryptocurrency without holding it directly.
Performance Comparison: MicroStrategy vs. Major Indices
The correlation between Bitcoin and MicroStrategy’s stock performance is undeniable:
- MicroStrategy (MSTR) YTD gain: +84%
- Bitcoin YTD gain: +103%
- Dow Jones Industrial Average: +8.2%
- S&P 500: +6.7%
- Nasdaq Composite: +4.3%
Over the past 12 months:
- MicroStrategy: +530%
- Bitcoin: +573%
- S&P 500: +62%
- Nasdaq: +83%
- Dow Jones: +58%
These figures highlight how MicroStrategy has outperformed traditional benchmarks by a wide margin—largely riding the wave of Bitcoin’s meteoric rise.
Accounting Implications: Profits vs. Paper Gains
One critical nuance for investors to understand involves accounting rules for digital assets under U.S. GAAP.
Because Bitcoin is classified as an intangible asset, unrealized gains are not reflected on the balance sheet unless the asset is sold. However, if the market price drops below the carrying value (i.e., average purchase price), companies must recognize impairment losses even without selling.
This asymmetric treatment means MicroStrategy can’t book profits until it sells BTC—but must report losses if prices fall below $24,214.
While this creates volatility in reported earnings, long-term investors focused on asset accumulation may view it as a minor hurdle compared to the strategic benefits of holding a deflationary digital asset.
Beyond Bitcoin: The Underrated Software Business
While much of the market focus centers on MicroStrategy’s Bitcoin holdings, BTIG emphasizes that the company still operates a viable and transitioning core business.
MicroStrategy provides advanced analytics and data visualization tools used by large enterprises across finance, healthcare, and government sectors. The company is actively shifting from legacy perpetual licensing models to a cloud-first, SaaS (Software-as-a-Service) subscription model—a move that promises more predictable revenue streams and improved margins over time.
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Though overshadowed by its crypto narrative, this foundational business generates consistent cash flow that supports ongoing Bitcoin acquisitions and operational stability.
Market Influence and Industry Adoption
MicroStrategy’s bold move paved the way for other corporations to consider Bitcoin as a treasury reserve asset. Notable followers include:
- Tesla: Purchased $1.5 billion worth of Bitcoin in early 2025 and briefly accepted it as payment for vehicles.
- Square (now Block): Led by Jack Dorsey, has maintained a strong pro-Bitcoin stance and added BTC to its balance sheet.
These adoptions signal growing institutional confidence in Bitcoin’s role as a long-term store of value—even amid regulatory scrutiny and market swings.
Frequently Asked Questions (FAQ)
Q: Is MicroStrategy a cryptocurrency company?
A: No. MicroStrategy is primarily a software company specializing in business intelligence and analytics. However, due to its massive Bitcoin holdings, it functions as a de facto Bitcoin investment vehicle for many investors.
Q: How does Bitcoin’s price affect MicroStrategy’s stock?
A: There is a strong positive correlation. Since most of MicroStrategy’s net asset value comes from its BTC holdings, stock performance closely tracks Bitcoin’s price movements—especially over medium to long time horizons.
Q: Can MicroStrategy sell its Bitcoin for profit?
A: Yes, but under current accounting rules, any sale would trigger taxable gains. To date, the company has held rather than sold its Bitcoin, reinforcing its “buy-and-hold” strategy.
Q: What happens if Bitcoin price drops below $24,000?
A: If the market price remains below MicroStrategy’s average cost basis, the company must record quarterly impairment charges, which negatively impact earnings—even if no coins are sold.
Q: Does MicroStrategy generate revenue from sources other than Bitcoin?
A: Yes. Its core software business continues to operate and transition toward SaaS subscriptions, providing ongoing revenue and supporting operational expenses.
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Final Thoughts: A High-Risk, High-Reward Play on Digital Assets
MicroStrategy represents a unique hybrid in today’s market—a legacy tech firm turned flagship Bitcoin holder. For investors comfortable with volatility and aligned with the digital asset thesis, it offers leveraged exposure to Bitcoin’s upside without managing private keys or exchanges.
With BTIG projecting Bitcoin to reach $95,000 by 2025 and MicroStrategy stock priced for further gains, the next 18 months could be pivotal.
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Bitcoin, MicroStrategy, digital gold, cryptocurrency investment, SaaS transition, Bitcoin price forecast 2025, institutional adoption, stock analysis