Analyst Singles Out MicroStrategy, Galaxy Digital as Strong Buys

The Bitcoin price is nearing a historic $100,000, propelled by a remarkable rally following the U.S. elections. This has sparked interest in identifying promising investment opportunities in the crypto space for 2025. According to Mark Plamer, an analyst at Benchmark, Galaxy Digital and MicroStrategy Inc. (NASDAQ: MSTR) are two long-standing favorites among cryptocurrency fans.

Palmer estimates MicroStrategy’s fair value at $650, representing a potential 68% increase from its current price. For Galaxy Digital, he projects at least a 16% rise, targeting $29 based on his analysis.

MicroStrategy, initially established as a software firm by Michael Saylor, has evolved into a crypto-focused entity. Saylor, whose net worth is estimated at $9.6 billion, has aggressively invested in Bitcoin, cementing his reputation as a devoted supporter of the digital asset.

While MicroStrategy’s software division remains strong, its financial contribution to the company is minimal in the context of its overall valuation. According to Palmer, the software segment accounts for just $2 of the $650 target price. He explained that while there are some operational synergies, the software business has limited significance in determining the company’s stock value.

Saylor’s bold strategy of acquiring and retaining Bitcoin reserves has generated significant attention. Palmer likened it to a hypothetical scenario where the CEO of a major retailer began stockpiling Tesla vehicles for their batteries. Although unconventional, Saylor’s moves bear similarities to how oil companies are valued based on their reserves and the potential to utilize those assets in the future.

Palmer elaborated that the metric known as Bitcoin yield—calculated by dividing the number of bitcoins purchased during a specific period by the company’s total diluted shares—offers insight into the additional value generated by MicroStrategy’s treasury operations.

For example, recent filings with the SEC revealed that between November 18 and November 24, the company spent $5.4 billion acquiring 55,000 bitcoins at an average price of $97,862 each. This brings its total Bitcoin holdings to approximately 386,700, purchased at a cumulative cost of $21.9 billion, averaging $56,761 each.

Turning to Galaxy Digital, its CEO and founder Mike Novogratz has drawn on his experience at Goldman Sachs to create a crypto-focused firm with a capital markets approach. The company facilitates trading and lending, positioning itself as a sophisticated option for institutional investors venturing into crypto.

Palmer noted that as institutional interest in cryptocurrency grows, Galaxy Digital is well-placed to capitalize on this trend. The firm has also gained traction among those exploring AI, thanks to its expansion of the Helios data center in West Texas.

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