The elevated dimension of leveraged MicroStrategy (MSTR) exchange-traded funds (ETFs) and the flows they appeal to are having a extra pronounced impact on the corporate’s inventory and crypto markets than earlier than, JPMorgan (JPM) mentioned 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 mentioned.
November noticed a file of just about $11 billion stream into U.S. spot bitcoin (BTC), spot ether (ETH) and leveraged MicroStrategy ETFs mixed, the report mentioned, with the leveraged MSTR ETFs accounting for $3.4 billion, or nearly a 3rd, of the whole.
“This highlights the rising affect of MicroStrategy’s leveraged ETFs in crypto markets by way of facilitating MicroStrategy’s bitcoin buy 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 expansion in these ETFs is fuelled by growing investor demand in acquiring amplified publicity to bitcoin by means of an ETF wrapper,” the authors wrote, including that this may not usually be obtainable to retail traders.
MicroStrategy shares permit traders 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 concerning the potential profitability of MicroStrategy’s company technique, together with its plans to change into a bitcoin financial institution and develop BTC functions, and this provides a premium to the agency’s valuation, the report added.
MicroStrategy at the moment 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 a part of Influential Nasdaq-100 Index. Here is What That Means for the Inventory
