Strategy, formerly called MicroStrategy, could increase its Bitcoin holdings to surpass 1 million Bitcoin and hold about 5% of Bitcoin's total supply, according to analysts at Bernstein.

The research note, led by Gautam Chhugani, predicts a bull case updated its prediction based on Strategy's Q4 financial results and recent Bitcoin purchases.

Bernstein has an "outperform" rating on the stock and a $600 price target, implying 75% upside. Based on long-term price scenarios and debt structure, a 55% premium is assigned to the Bitcoin treasury.

MicroStrategy’s stock MSTR is trading at $335.26, down by 2.09% since the last day.

Bernstein believes Bitcoin could hit $200,000 by the end of 2025, $500,000 by 2029, and $1 million by 2033. Strategy's earnings per share are expected to increase to $207, up from $67.50.

In a "bull case," Strategy's Bitcoin stack would amount to 5.8% of the current 19.8 million Bitcoin in circulation, compared to only 2.5% at present. This assumed good capital markets with low interest rates, and the bull cycle continued.

In this case, Strategy's debt could hit $100 billion, with equity proceeds of $84 billion. In a base case, holdings would climb to around 4% of the circulating supply and, in a bear case, stagnate at around 2.6%, possibly resulting in forced liquidations.

On March 25, Strategy owned 506,137 Bitcoin — bought at an average price of $66,608 — representing $33.7 billion. Its most recent purchase was 6,911 Bitcoin for $584.1 million by selling MSTR stock and creating perpetual preferred shares (STRK, STRF). Strategy has brought in more than $23 billion since October.

Bernstein considers its Bitcoin treasury a core business, although the firm has faced issues around its premium-to-NAV valuation and aggressive acquisition pace. Strategy's shares closed Tuesday at $341.81, a gain of 1.8%. It is still a key player in institutional Bitcoin accumulation.

At press time, Bitcoin’s price stands at $86,982.07, down by 1.33% in the last 24 hours.  Interestingly, today, Strategy's preferred stock STRF launched on Nasdaq.