TD Cowen Publishes Bullish Report on Bitcoin And MicroStrategy

Investment banking company, TD Cowen, published a caller study connected MicroStrategy and its adoption of Bitcoin, according to documents obtained by Bitcoin Magazine.

“MicroStrategy represents a caller benignant of firm, which generates dollar -based currency travel from endeavor bundle products and unreality quality services but past converts its excess currency travel – connected an efficaciously -leveraged ground – into bitcoin,” the study said. “What started arsenic a antiaircraft strategy to support the worth of its assets has evolved rapidly into an opportunistic strategy intended to accelerate the instauration of shareholder value…This hybrid firm strategy represents a paradigm shift, successful our view.”

The study details however this guardant reasoning institution strategy is designed to combat the depreciation of purchasing powerfulness holding the US dollar. “Unlike fiat money, the full proviso of bitcoin is capped astatine 21 cardinal bitcoins, making it a perchance superior store of value, we think.” TD Cowen explains that this strategy volition not beryllium lived abbreviated term, but it volition beryllium a agelong word strategical program predicting that bitcoin volition go a superior store of worth successful examination to metals and fiat currencies. And that due to the fact that of MicroStrategy’s ample BTC holding, they “see MSTR arsenic an charismatic conveyance for investors looking to summation Bitcoin exposure.”

Significant adjacent word catalysts for the terms of Bitcoin to emergence see the support of a spot Bitcoin ETF by the SEC, improvement of the Lightning Network, imaginable FASB / GAAP accounting changes with respect to Bitcoin holdings, and the upcoming bitcoin halving successful little than a year, according to the concern bank.

The study is bullish connected the imaginable support of a spot Bitcoin, joining galore different firms successful saying it’s a substance of “when” alternatively than “whether” 1 volition yet get approved by the SEC. TD Cowen’s Washington argumentation adept Jaret Seiberg wrote successful a study earlier this period stating “we presumption support of a spot Bitcoin ETF arsenic inevitable.”

TD Cowen wrote “Bitcoin could yet correspond a superior store of worth comparative to each different forms of money, whether fiat, metallic -based, oregon digital, we believe.” The study describes Bitcoin’s properties of durability, portability, fungibility, verifiable, divisibility, and scarcity, establishing history, and censorship absorption arsenic reasoning for this.

Bitcoin is comparatively new, lone being astir since 2009. Despite this tiny magnitude of established past successful examination to golden oregon the dollar, TD Cowen believes that Bitcoin “has weathered capable trials successful the marketplace to suggest a precocious likelihood it volition not vanish arsenic a valued plus immoderate clip soon.” They foretell that the plus volition lone turn stronger owed to the lindy effect, meaning the longer Bitcoin tin enactment successful existence, the much assurance nine volition person successful it that it volition proceed to exist.

If Bitcoin is to instrumentality implicit and transcend the $17 trillion golden stocks market, it would enactment the terms of BTC astatine astir $800,000, successful 2023 dollar presumption of purchasing power, the study says.

As much adoption of Bitcoin happens and request increases, TD Cowen predicts, successful the abbreviated term, an upside script wherever the terms of BTC appreciates 127% to astir conscionable supra it's each clip precocious astatine $70,000. But if regulators proceed cracking down connected the plus class, they foretell a downside script of different clang backmost to $15,000.

Despite what galore large firms person negatively reported connected Bitcoin mining and its vigor consumption, TD Cowen stated that “Bitcoin mining is successful our sentiment 1 of the astir efficient, cleanest concern uses of energy and is improving its vigor ratio astatine a faster complaint than astir different industries.” The concern slope elaborate that “simple economics – alternatively than authorities dictate – are driving bitcoin miners to the lowest -cost sources of energy.”