TLDR
- Citigroup upgraded its Strategy (MSTR) price target to $240 from $136 while maintaining a Buy rating on the stock.
- The revised target suggests approximately 50% potential upside based on MSTR’s October 1 closing price of $160.50.
- The bank increased its 12-month Bitcoin price projection to $113,000 from $82,000, pointing to more consistent ETF flows.
- Strategy shares advanced 2.7% during Friday’s pre-market session after the announcement.
- As of September 27, Strategy held 847,666 BTC purchased at an aggregate cost of $63.95 billion.
Shares of Strategy (MSTR) advanced 2.7% during Friday’s pre-market hours. The upward movement followed Citigroup’s decision to substantially increase its price target on the Bitcoin treasury company to $240 from a previous $136.
The bank maintained its Buy recommendation on the equity. Based on Strategy’s October 1 close at $160.50, Citigroup’s updated target represents around 50% potential appreciation.
The upgrade didn’t occur in isolation. It accompanied Citi’s own revised Bitcoin price forecast, which jumped to $113,000 for the next 12 months from a prior $82,000 estimate.
The firm also adjusted its ether projection upward to $3,028 from $2,240. Analysts attributed these changes to increased crypto market activity and more stable inflow patterns into exchange-traded funds.
Breaking Down Citi’s Valuation Framework
Citigroup’s analytical approach divides the potential upside into two components. Approximately 34% stems from the elevated Bitcoin price forecast. An additional 16% derives from an anticipated expansion in Strategy’s multiple to net asset value, or mNAV.
Analysts increased their Bitcoin Yield Multiple assumption to 4.0x from 2.5x. This adjustment drove the implied mNAV to 1.24x, up from 1.065x.
Historical data shows that Strategy’s mNAV has fluctuated between 1.25x and 1.50x during periods when Bitcoin traded above the $85,000 to $90,000 range. However, Citi selected a more conservative valuation due to Strategy’s expanding cash position, which dilutes per-share Bitcoin holdings.
This represents a significant reversal. Earlier in 2026, Citi had reduced its target to $136 from $260 following a more bearish Bitcoin outlook. Friday’s announcement partially unwinds that previous reduction.
Factors Behind Crypto’s Recent Strength
Digital assets have posted impressive gains lately. Bitcoin has surged nearly 40% over the trailing three-month period, while ether has rallied approximately 68%, based on CoinGecko tracking.
These advances have reduced both cryptocurrencies’ year-to-date declines to roughly 4% and 9%, respectively. A weakening U.S. dollar, triggered by Treasury buybacks of longer-maturity bonds, has provided additional support.
U.S. spot Bitcoin ETFs experienced net outflows totaling approximately $5.7 billion through mid-July. Since then, flows have reversed course, and Citigroup anticipates another $5 billion in net inflows during the coming 12 months.
Legislative developments have been mixed. The Senate declined to advance the Clarity Act, limiting near-term prospects for comprehensive market-structure reform.
Yet subsequent regulatory announcements from the SEC helped offset some negative sentiment. The net effect has been relatively neutral for the time being.
Meanwhile, Strategy continues its accumulation strategy. According to its September 28 Form 8-K filing, the company acquired 1,665 BTC during the week ending September 27, paying an average of $85,681 per coin.
These acquisitions were financed through sales of Class A common stock. Strategy’s aggregate Bitcoin position now totals 847,666 BTC, purchased for a cumulative $63.95 billion at an average price of $75,437 per Bitcoin.
The filing also disclosed a USD Reserve balance near $5.02 billion alongside $1.00 billion in cash. Strategy has continued repurchasing its variable-rate preferred shares using proceeds from at-the-market offerings.
Earlier in September, the firm purchased 950 BTC for $75.7 million using cash on hand rather than issuing new equity. That transaction brought total holdings to 846,000 Bitcoin at that point.
With Bitcoin currently trading around $86,000 in early October, the market value of Strategy’s holdings exceeds the company’s total acquisition cost.
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