6 months ago
The accrued size of leveraged MicroStrategy (MSTR) exchange-traded funds (ETFs) and the flows they pull are having a much pronounced effect connected the company's banal and crypto markets than before, JPMorgan (JPM) said successful a probe study connected Wednesday.
These ETFs played a important relation successful amplifying the stock's near-60% emergence successful November, the slope said.
November saw a grounds of astir $11 cardinal travel into U.S. spot bitcoin (BTC), spot ether (ETH) and leveraged MicroStrategy ETFs combined, the study said, with the leveraged MSTR ETFs accounting for $3.4 billion, oregon astir a third, of the total.
"This highlights the rising interaction of MicroStrategy's leveraged ETFs successful crypto markets via facilitating MicroStrategy's bitcoin acquisition program," analysts led by Nikolaos Panigirtzoglou wrote.
The institution founded by Michael Saylor has spent $13 cardinal buying bitcoin this 4th alone, the study noted.
"The maturation successful these ETFs is fuelled by expanding capitalist request successful obtaining amplified vulnerability to bitcoin done an ETF wrapper," the authors wrote, adding that this would not usually beryllium disposable to retail investors.
MicroStrategy shares let investors who are restricted from investing successful spot bitcoin ETFs to get vulnerability to the world's largest cryptocurrency, and owed to the bundle company's inclusion successful benchmarks specified arsenic the MSCI World index, the banal benefits from sizable passive flows.
The company's stock terms besides reflects capitalist optimism astir the imaginable profitability of MicroStrategy's firm strategy, including its plans to go a bitcoin slope and make BTC applications, and this adds a premium to the firm's valuation, the study added.
MicroStrategy presently meets the eligibility criteria for inclusion successful the Nasdaq-100 index, according to Benchmark expert Mark Palmer.
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