The elevated measurement 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 big position in amplifying the inventory’s near-60% rise in November, the financial institution stated.
November noticed a document of just about $11 billion circulate 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 virtually a 3rd, of the full.
“This highlights the rising impression 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 is able to not usually be out there 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 because of the software program firm’s inclusion in benchmarks such because the MSCI World index, the inventory advantages from sizable passive flows.
The corporate’s share value 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 presently meets the eligibility standards for inclusion within the Nasdaq-100 index, in accordance with Benchmark analyst Mark Palmer.
Learn extra: MicroStrategy Appears Poised to Be a part of Influential Nasdaq-100 Index. This is What That Means for the Inventory
