Analysts predict that Bitcoin’s next pre-halving rally could begin in the next four months.
The upcoming Bitcoin (BTC) halving is set to blow fresh wind in the sails of Bitcoin-focused stocks such as the Michael Saylor-founded tech firm MicroStrategy.
In a research note shared with Cointelegraph, New York-based investment firm Berenberg Capital Markets explained its reasons for a bullish outlook on MicroStrategy, for which Berenberg has given a $430 price target.
According to the analysts, MicroStrategy derives the bulk of its value from the 152,333 Bitcoin it held on its books as of June 28, adding that a Bitcoin halving rally could see its shares gain significantly in price.
Last Bitcoin ETF decision deadline: 3/19/24
Bitcoin halving estimate: 4/16/24
— Will (@WClementeIII) July 10, 2023
“If the historical pattern established by the first three bitcoin halvings continues to play out with the fourth halving, then the pre-halving rally would begin about four months from now,” read the note.
As Berenberg highlights, previous halvings cycles have seen the price of Bitcoin surge by a minimum of 682%. At the time of the first Bitcoin halving on Nov. 28, 2012, the price of Bitcoin hovered around $12.
367 days later its price peaked at $1,164.
The analysts noted that while Bitcoin’s supply treads a “predetermined path,” the overall demand for Bitcoin needs to be gauged before anyone could predict the “potential magnitude” of a future rally.
To measure this, the research looked to the recent surge in spot Bitcoin ETF applications from some of the world’s “largest and highest-profile” asset managers as proof that institutional adoption of Bitcoin is on the rise.
The investor note also drew attention to the pro-Bitcoin remarks made by BlackRock CEO Larry Fink on July 5, where he sounded like “a high-conviction Bitcoin maximalist.”
The research report was written by equity analyst Mark Palmer, along with associates Matthew Laflash and Hassan Saleem.
Shares of MicroStrategy are currently trading for $408, having gained nearly 180% since the beginning of 2023, according to data from TradingView. Meanwhile, the price of Bitcoin has increased 84% since the start of the year.