Citigroup Sees 53% Upside in Strategy Stock as Bitcoin Forecast Soars

One of Wall Street's oldest banks, Citigroup, has made a bold prediction about the stock of Strategy, a company that holds a record 847,666 Bitcoins. Citigroup analyst Peter Christiansen believes the stock, listed on the Nasdaq exchange under the ticker MSTR, will reach $240, a 53% climb from its current price of $156.76.

This call comes after Citigroup raised its 12-month forecasts for Bitcoin and Ethereum, the two biggest cryptocurrencies, by more than 35%. Strategy's stock is closely tied to Bitcoin, as it uses new share sales to buy more of the cryptocurrency and hold it in its reserves.

The company's chairman, Michael Saylor, has a history of being bullish on Bitcoin, and his company's strategy has been to buy and hold the cryptocurrency. However, this year's Bitcoin slump forced Strategy to pause its buying and even sell some coins.

Citigroup's prediction is based on two key assumptions: that Bitcoin will reach $113,000 a year from now, and that investors will pay a higher premium for the wrapper around the Bitcoin, known as the mNAV. If these assumptions are correct, the stock could indeed reach $240.