Bitcoin Block Reward Halving Expected to Impact MicroStrategy Shares Significantly

Berenberg Capital Markets expects the block reward halving of Bitcoin, expected to take place in the first half of 2024, to have a significant impact on the shares of MicroStrategy (MSTR), a US-based software company that has been regularly buying BTC for about three years.

Bitcoin’s Block Reward Halving Could Skyrocket MicroStrategy Shares

Berenberg Capital Markets fundamentally points to the approaching Bitcoin block reward halving as the basis of their significant bullish expectations for Michael Saylor’s MicroStrategy.

The company, which set a bullish target of 430 dollars for Virginia-based MicroStrategy, in their research note shared that the company’s market value primarily comes from the over 150,000 BTC it holds on its balance sheet, and they expect the significant Bitcoin rally anticipated after the block reward halving to have a serious impact on the company’s shares.

As known, block reward halving (halving) means the reward amount (coin/token amount) given per block to miners is reduced by 50 percent, effectively slowing down the entry speed of new coin/token into the market. Bitcoin’s fourth block reward halving is expected to occur on April 26, 2024.

Bitcoin Block Reward Halving Rally Could Start 4 Months Later

Berenberg Capital Markets noted, “If the historical model created by the first three Bitcoin block reward halvings continues with the fourth block reward halving, it means the rally before the block reward halving will start approximately four months later. If a rally occurs after the fourth block reward halving and this rally lasts as long as the rallies after the last few block reward halvings, it will continue until around October 2025.”

The company added, “If the fourth Bitcoin block reward halving triggers a strong rally in the Bitcoin price similar to those seen before and after the first three halvings, we believe it is likely that MSTR shares will also rise in tandem. This is because the correlation between the company’s share price and the Bitcoin price is approximately positive 0.90.”

According to price data, MicroStrategy shares have risen over 181% since the beginning of the year.

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