According to the research report published on Monday, MicroStrategy raised more than $1.5 billion in the first quarter and allocated these funds to Bitcoin investment. The company purchased another 25,250 Bitcoins, bringing its total Bitcoin holdings to 214,400. The current value of this investment is approximately 13.6 billion dollars.

MicroStrategy bases a significant part of its corporate strategy on Bitcoin accumulation. The amount of Bitcoin the company currently holds corresponds to almost 1% of the approximately 19.7 million Bitcoins in circulation. This makes MicroStrategy one of the companies most invested in Bitcoin among institutional investors.

According to the information in the report, MicroStrategy achieved double-digit subscription service revenue growth in the first quarter as it accelerated its transition to the cloud system. But despite the positive developments, the company announced in a press release on Monday that it incurred a net operating loss of $53.1 million in the first quarter. The source of this loss was announced as a digital asset impairment record of $191.6 million.

The significant increase in the price of Bitcoin in the first quarter increased the value of MicroStrategy’s assets. The company could take advantage of this situation to adopt the new digital asset fair value accounting standard and thus report a huge profit. However, MicroStrategy did not choose this path.

While Canaccord maintained his “buy” rating on the stock, he also explained the reasons why he lowered MicroStrategy’s price target to $1,590. The team, led by analyst Joseph Vafi, lists two factors as the main determinants of the new price target: “Bitcoin price continuing to rise” and “the value of the software business being revised slightly upwards.” The report also notes an interesting point: “Due to the premium of MSTR over existing Bitcoin holdings, we did not account for this as an upside trigger from current levels.”

This statement implies that MicroStrategy stock price is overvalued relative to Bitcoin price, which may limit potential future gains. The authors emphasize that “the current 71% equity value premium over Bitcoin holdings obtained with the HODL strategy is still quite significant and therefore a contraction here should be considered a risk factor.”

Canaccord notes that MicroStrategy’s Bitcoin holdings have scarcity value and that these investments remain one of the best ways to access the digital asset for most stock market investors. The report states that this structure “provides the potential for an additional premium to the spot price for MSTR shares to reemerge.”

From the Bitcoin market perspective, the outlook is positive. “Bitcoin price is trending upwards, driven by US Bitcoin spot exchange-traded funds (ETFs) approvals from heavyweight asset managers and accompanying strong adoption, and the recent Bitcoin halving,” the report said. expressions are included.

As a result, MicroStrategy’s continued investments in Bitcoin without slowing down lead to different views on the future of the company. The decrease in analysts’ price targets may indicate possible fluctuations in the Bitcoin market. However, time will tell about the long-term course of Bitcoin and how sustainable MicroStrategy’s strategy in this area will be.

Although it is difficult to predict exactly what impact MicroStrategy’s Bitcoin investments will have on the company and the cryptocurrency market in general, it is clear that this is an important development that should be followed closely in the future.