Key insights
- MicroStrategy (MSTR) stock experienced significant volatility due to its Bitcoin holdings. Despite a recent small sale of Bitcoin that spooked investors, the company announced a new purchase, which has helped stabilize the stock. Options traders anticipate a potential 9% swing in either direction this week. Citi Research maintains a bullish stance on both MSTR and Bitcoin, citing the company's strategic outlook and active management of its crypto assets.
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Investors' eyes are on Strategy (MSTR) after last week's crypto crashout.
The enterprise software company, known mainly for stockpiling bitcoin, recently sold some of its stash for the first time since 2022, spooking investors despite the transaction being relatively small. Crypto markets, meanwhile, started to crack as bitcoin slid to lows unseen since 2024 to trade at less than half of its October peak. Strategy stock was down more than 22% this year through Friday's close, compared to the S&P 500's 7% gain.
Strategy's stock has struggled since it hit its 52-week high last July. Options-based pricing analysis can help investors get a sense of what to expect next, though it's only one clue.
Strategy's stock is moving higher again today, rising some 4% in early trading. The company's announcement that it bought 1,550 bitcoin last week at an average cost of about $65,000 likely soothed some concerns that the firm was in sell mode.1 (Read Investopedia's coverage of today's trading here.) Options traders appear to expect more volatility ahead: Recent pricing indicates that the stock could swing about 9% in either direction through Friday. A move of that size could send Strategy stock back up to $139, or down to $115.
Citi Research remains bullish about Strategy—and bitcoin, which recently traded near $64,000. Alex Saunders in a report early last week said the company's small sale "has had an outsized effect," on the cryptocurrency but that it doesn't change the firm's "strategic outlook."2 The firm has a base-case bitcoin price target of $112,000; its bear case is $57,000, and its bull case $166,000, per a mid-March forecast.
Citi stock analyst Peter Christiansen hasn't changed his bullish stance on Strategy since his post-earnings report last month, writing that there is "a lot to like" about Strategy's portfolio strategy shift that includes increasing active management of its bitcoin and its "broadening" investor universe through offerings like preferred shares.3 (The STRC, or "Stretch," preferred shares closed Friday about 6% off its par value.)
Street analysts remain bullish on Strategy. All five brokers tracked by Visible Alpha rate it a "buy," and their consensus price target, $322 implies upside of almost 170% from Friday's close.
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