Analyst: MicroStrategy could generate revenue from Bitcoin lending

The proliferation of institutional bitcoin custodians could provide an opportunity for MicroStrategy, Benchmark analysts have noted.
In a report released on the 24th (local time), Benchmark fintech analyst Mark Palmer said, "Micro
As Strategy continues to leverage its assets to buy Bitcoin and begin lending some of the Bitcoin at low risk, the company's stock price, MSTR, could reach $215 per share (roughly $3,084 million).
MicroStrategy's move to buy Bitcoin is one of the main reasons for the rise in the company's stock price. MSTR shares closed at 10,000 yen on August 9.
After a 1-for-1 stock split, it is currently trading at about $153. While the company's core business is enterprise software, its public market value has increased primarily from 2020.
This is due to the amount of Bitcoin that has started to accumulate. On the 18th, MicroStrategy's Michael Saylor
"Bitcoin is the perfect store of value," Saylor said in a podcast.
"It will be a form of digitally-informed capital and will be able to generate low-risk returns through digital banking services such as lending and borrowing."
Despite investor concerns about MSTR's valuation, its shares are trading at a premium to the value of its bitcoin holdings.
"The flywheel effect seen in Bitcoin buying strategies supports the argument that the premium is justified, and that it is a feature of the strategy, not a bug," they argue.
During its earnings call on August 1, MicroStrategy doubled down on its bitcoin buying efforts and unveiled a unique performance metric: Bitcoin Yield.
Yield measures the ratio of bitcoin held to outstanding shares, using the number of bitcoins per share as an indicator of corporate performance.
In an Aug. 2 analyst note, Palmer said the concept is intended to improve efficiency and intelligent risk management of bitcoin buying strategies.
On September 20, Microstrategy completed a $1.01 billion convertible note offering, which
MSTR used the proceeds from its latest convertible bond offering to buy Bitcoin and repay debt. A portion of the proceeds from MSTR's latest convertible bond offering will be used to repay $500 million in 6.125% secured notes due in 2028.
"The repayment of the note resulted in the redemption of approximately 69,080 bitcoins provided as collateral, valued at approximately $4.4 billion," Palmer said in an email.
Palmer said this presents an opportunity for MicroStrategy, especially as institutional crypto custodians proliferate in the U.S. and interest in cryptocurrencies rises.
“With growing interest from relevant institutions, there are greater opportunities for us to develop this technology,” he said.