MicroStrategy: The Bitcoin Giant

Business intelligence company MicroStrategy is the largest corporate holder of bitcoin, resulting in a 570% surge in MSTR‘s share price over the past year. Mizuho Securities expects bitcoin to rise another 30% over the next three years, prompting the firm to assign a new ‘outperform’ rating to MicroStrategy’s stock.

Mizuho analysts, led by Dan Dolev, highlight increasing global adoption of bitcoin and a favorable political landscape under U.S. President Donald Trump.

> “We identified a 79% correlation between bitcoin adoption growth (measured by the number of bitcoin wallet addresses with >0.01 bitcoin) and bitcoin price,” the analysts mentioned in a note to clients. “If adoption growth continues on this trajectory through 2027, we can expect 25-30% annual bitcoin price appreciation.”

Recently, MicroStrategy has ramped up its bitcoin accumulation strategy using proceeds from debt and equity issuance to increase its bitcoin holdings per diluted share. As of Jan. 27, MicroStrategy holds 471,107 BTC valued at over $46 billion. Currently, MSTR trades at about a 75% premium to its underlying BTC value.

> “Unlike other vehicles offering bitcoin exposure (e.g., bitcoin ETFs or bitcoin itself), MSTR can increase its bitcoin per diluted share,” the Mizuho analysts stated. “As an operating company, it can access debt and equity capital markets to acquire more bitcoin.”

Mizuho emphasized MicroStrategy’s first-mover advantage, enabling it to achieve scale and access capital markets early. This is illustrated by its ’21/21 Plan’, aimed at raising $21 billion through debt and equity by 2027 to purchase more bitcoin.

> “We believe favorable market conditions put MSTR on a fast track to exceed its targets (already raised $3bn/$18bn of debt/equity since the October announcement),” Mizuho analysts wrote. They project MSTR‘s bitcoin holdings could reach 783,000 at a $166,000 market price by the end of 2027, equating to a $130 billion value.

Recently, MicroStrategy initiated a convertible preferred stock offering targeted at institutional and select retail investors, featuring 2.5 million shares of MSTR’s Series perpetual strike preferred stock. MicroStrategy co-founder and Executive Chairman Michael Saylor remarks that the company aims to provide investors with both returns and volatility at factors of 1.5x compared to bitcoin.

As per The Block’s MSTR price data, MicroStrategy’s stock is currently trading at approximately $347 per share, with a market capitalization of about $87 billion.