In a notable development for Bitcoin investors, Citigroup has reaffirmed its buy rating on MicroStrategy, now known as Strategy, with a price target of $325. This announcement signals a sustained institutional interest in Bitcoin, particularly amidst current short-term price fluctuations.
The endorsement from Citigroup, a financial giant managing approximately $1.75 trillion in assets, underscores confidence in Bitcoin as a viable treasury asset for corporations. Despite facing recent volatility, the banking powerhouse has maintained its positive outlook on companies that incorporate Bitcoin into their financial strategies.
On February 9, the revised target was communicated through a post by BitcoinTreasuries, with analyst Peter Christiansen leading the report. Citigroup initially initiated coverage of MicroStrategy in October, setting an even higher price target. However, this was adjusted downwards in December due to broader market weaknesses, yet the buy rating remained intact.
MicroStrategy”s management, led by CEO Michael Saylor and CEO Phong Le, has expressed commitment to its long-term Bitcoin accumulation strategy. Reports indicate that the firm suffered a net loss of $12.4 billion in the fourth quarter, with Bitcoin reserves falling below their average purchase price of $76,052 for the first time since 2023. Nevertheless, Saylor and Le have addressed concerns about balance sheet risks, clarifying that significant liquidation threats would only emerge if Bitcoin prices dipped to $8,000 for an extended period.
Financial analysts from firms such as Canaccord Genuity, Maxim Group, and TD Cowen have also voiced their support for MicroStrategy, although some have adjusted their price targets downward. For instance, Maxim Group recently lowered its target from $425 to $200, a reflection of the shifting market dynamics resulting from Bitcoin”s price decline.
Despite these changes, many view MicroStrategy as a proxy for institutional exposure to Bitcoin. The backing from major financial institutions is indicative of a broader confidence in Bitcoin”s role within institutional investment portfolios, potentially enhancing its acceptance in public markets.
As of the time of reporting, MicroStrategy”s stock experienced a near 4% decline in premarket trading on February 9, despite having closed over 26% higher the previous Friday. Trading volume reached an impressive 56 million shares, while Bitcoin was trading around $69,110, reflecting a drop of more than 2% within a 24-hour window.
Ultimately, institutional activity continues to play a pivotal role in shaping market sentiment towards Bitcoin, and Citigroup”s reaffirmation of MicroStrategy”s buy rating serves as a strong indicator of ongoing institutional commitment to digital assets.
