Bitcoin-focused company Strategy—formerly known as MicroStrategy—received a “Buy” rating from Citi, with analysts highlighting significant upside potential for the stock. At the same time, the bank warned that the company's heavy reliance on Bitcoin could expose investors to significant price swings.
In brief
- Citi analysts give Strategy a “Buy” rating, forecasting strong upside potential if Bitcoin hits the bank's forecasted $181,000 level.
- Strategy stock price could benefit from Bitcoin momentum, but remains vulnerable to sharp price corrections.
- The company holds over $77 billion in Bitcoin, cementing its position as the largest corporate holder of BTC in the world.
- Analysts warn that MSTR's valuation is heavily dependent on Bitcoin's performance, magnifying both gains and losses.
Strategy shares could rise as Bitcoin nears Citi's forecast of $181,000
In a note released Tuesday, Citi analysts said Nasdaq-listed shares of Strategy (MSTR) could continue to rise if Bitcoin hits $181,000 in the next 12 months, matching the bank's latest price prediction for the cryptocurrency.
The stock closed at $301.91, up 1.7% on the day, according to Yahoo Finance—still below its 2024 high of $473.83. Bitcoin, meanwhile, was trading at $111,490, down more than 11% from its all-time high of $126,080, according to CoinGecko data.
Citi said MSTR's net asset value (NAV) premium could remain in a range of 25% to 35%, reflecting its historical Bitcoin return multiple of 2.5x–3.5x. However, this prediction depends on maintaining positive momentum for the cryptocurrency.
Additionally, the report highlighted that Strategy's performance is closely linked to Bitcoin's price movements and general investor sentiment towards the digital asset market.
Citi Warns of High Risk in Strategy's Bitcoin Leveraged Stock
Citi warned that Strategy's stock remains very risky due to its leveraged exposure to Bitcoin. Analysts noted that the company's valuation depends almost entirely on the performance of the cryptocurrency. As a result, any prolonged decline in the price of Bitcoin could result in amplified losses for MSTR investors.
The stock poses significant risks due to its position as a leveraged proxy for Bitcoin. Its value is almost 100% tied to the sometimes volatile cryptocurrency, meaning that a moderate decline in the price of Bitcoin can result in amplified losses for MSTR shareholders.
Citi Analysts
Strategy began accumulating Bitcoin in August 2020 to seek higher returns amid global economic uncertainty during the COVID-19 pandemic. The company has since become the largest corporate holder of BTC, positioning itself as a proxy investment vehicle for investors seeking exposure to the leading cryptocurrency without directly owning it.
Strategy's BTC reserves exceed $77 billion, cementing its lead in the sector
Earlier this month, Strategy reached $77.4 billion in BTC reserves and currently holds 640,418 Bitcoin. Its co-founder and chairman, Michael Saylor, remains one of Bitcoin's strongest corporate advocates, often describing it as a superior store of value for businesses and investors alike.
Here are other companies with remarkable BTC reserves :
- MARA Holdings, Inc. (MARA) holds approximately 53,250 BTC, ranking among the largest institutional Bitcoin holders in the United States.
- The Nasdaq XXI-listed company owns 43,514 BTC.
- Metaplanet Inc. (MTPLF) comes in fourth with 30,823 BTC — often called the MicroStrategy of Japan for its aggressive accumulation strategy.
- Bitcoin Standard Treasury Company (CEPO) manages 30,021 BTC.
- Bullish (BLSH) holds 24,300 BTC, integrating Bitcoin into its broader digital financial operations.
- Riot Platforms, Inc. (RIOT) owns 19,287 BTC and remains one of the largest North American Bitcoin mining companies.
- Trump Media & Technology Group Corp. holds 15,000 BTC.
While several companies have followed Strategy's lead, analysts caution that this concentrated exposure to digital assets may not be suitable for all business models. Citi's latest note highlights that the rewards of BTC-related strategies can be substantial—but so are the risks when market volatility returns.
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