• MicroStrategy stock may could soar further on its unique bitcoin strategy, says Bernstein.

• MicroStrategy owns 1.8% of the total bitcoin supply and plans to increase its holdings.

• Bernstein projects the company will own $830 billion, or 4% of the total bitcoin supply by 2033.

MicroStrategy stock could continue its gravity-defying run thanks to its "unprecedented" bitcoin strategy.

That's according to Bernstein analysts writing in a note to clients on Monday. Shares of MicroStrategy are already up 533% year-to-date, about triple the return of Nvidia over the same time period.

Yet, according to Bernstein analyst Gautam Chhugani, the rally in MicroStrategy could intensify. Chhugani increased his MicroStrategy price target to $600 from $290, representing potential upside of 49% from current levels.

"MicroStrategy's Bitcoin treasury model is unprecedented on Wall Street," Chhugani said, calling the company a "Bitcoin magnet" for institutional investors.

The software firm, led by founder and chairman Michael Saylor, currently owns 386,700 bitcoins, or about 1.8% of the total 21 million supply.

According to Chhugani, MicroStrategy could eventually own 4% of the total bitcoin supply by the end of 2033 as it continues to raise capital at attractive deal terms to buy the cryptocurrency. Based on Bernstein's bitcoin price target of $1 million per token, that amount would be worth about 4% of the total supply.

"Bitcoin bull markets would mean, the premium could stay higher than historical average, allowing MSTR to sell more debt/equity, leading to more bitcoin buying," Chhugani said.

With a market valuation of nearly $100 billion, MicroStrategy trades at almost a 200% premium to the value of its $36 billion bitcoin stash.

A key factor to Chhugani's bullishness on MicroStrategy is the fact that the company has positioned itself as the pioneer in the corporate world when it comes to adding cryptocurrency to its balance sheet.

That strategy, which the company embarked on in August 2020, has allowed MicroStrategy to aggressively raise capital to buy more bitcoin.

The company announced in October its plan to raise $42 billion over the next two years to buy bitcoin via debt and equity sales. Having already raised $9 billion since that announcement, Chhugani believes the company is ahead of schedule and could raise the remaining $33 billion within 18 months.

But MicroStrategy's bull case ultimately hinges on the price of bitcoin continuing to rally, and Chhugani views that as highly likely.