The elevated dimension of leveraged MicroStrategy (MSTR) exchange-traded funds (ETFs) and the flows they entice are having a extra pronounced impact on the corporate’s inventory and crypto markets than earlier than, JPMorgan (JPM) stated in a analysis report on Wednesday.
These ETFs performed a major position in amplifying the inventory’s near-60% rise in November, the financial institution stated.
November noticed a report of just about $11 billion stream into U.S. spot bitcoin (BTC), spot ether (ETH) and leveraged MicroStrategy ETFs mixed, the report stated, with the leveraged MSTR ETFs accounting for $3.4 billion, or nearly a 3rd, of the full.
“This highlights the rising impact of MicroStrategy’s leveraged ETFs in crypto markets via facilitating MicroStrategy’s bitcoin purchase program,” analysts led by Nikolaos Panigirtzoglou wrote.
The corporate based by Michael Saylor has spent $13 billion shopping for bitcoin this quarter alone, the report famous.
“The growth in these ETFs is fuelled by increasing investor demand in obtaining amplified exposure to bitcoin through an ETF wrapper,” the authors wrote, including that this could not usually be accessible to retail buyers.
MicroStrategy shares permit buyers who’re restricted from investing in spot bitcoin ETFs to acquire publicity to the world’s largest cryptocurrency, and as a result of software program firm’s inclusion in benchmarks such because the MSCI World index, the inventory advantages from sizable passive flows.
The corporate’s share worth additionally displays investor optimism in regards to the potential profitability of MicroStrategy’s company technique, together with its plans to develop into a bitcoin financial institution and develop BTC functions, and this provides a premium to the agency’s valuation, the report added.
MicroStrategy at present meets the eligibility standards for inclusion within the Nasdaq-100 index, in accordance with Benchmark analyst Mark Palmer.
Learn extra: MicroStrategy Seems Poised to Be part of Influential Nasdaq-100 Index. This is What That Means for the Inventory
