Benchmark, a boutique investment banking firm, has initiated coverage of MicroStrategy with a buy rating and a share price target of $990. The firm’s research report, published on Tuesday, is based on a projected year-end 2025 valuation of the company’s bitcoin holdings and its business intelligence software activities.

The price target is contingent on the assumption that the price of bitcoin will reach $125,000 by the end of 2025. Benchmark believes that this price increase will be driven by the approval of multiple spot bitcoin ETFs by the SEC in January and the upcoming bitcoin halving, scheduled for late April.

Mark Palmer, Senior Equity Research Analyst at Benchmark, stated in the report, “The reduced pace of supply resulting from the halving has the potential to drive the price of the cryptocurrency meaningfully higher during the next couple of years.”

MicroStrategy’s share price surged over 8% in early trading on Tuesday, reaching $860.75.

The Bitcoin Halving

The bitcoin halving, scheduled for April this year, will reduce the reward that miners receive for validating and adding new blocks to the blockchain by 50%. This event occurs approximately every four years after 210,000 blocks are mined.

In the upcoming halving, the block reward will decrease from the current 6.25 BTC to 3.125 BTC per block. This mechanism is designed to control the supply of new bitcoins, making them more scarce over time.

Despite a recent decrease in the price of bitcoin, which fell over 9% in the past 24 hours to $57,210, Benchmark remains optimistic about the cryptocurrency’s future, citing potential price increases driven by the halving and the approval of spot bitcoin ETFs.