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MicroStrategy Inc. (NASDAQ: MSTR) has been considered an indirect Bitcoin spot ETF due to its treasury exposure to Bitcoin (BTC). The stock market now wonders if a Bitcoin ETF approval could negatively impact MSTR stock with capital outflow.
By December 27, 2023, MicroStrategy held 189,150 BTC in its treasury – worth approximately $8.5 billion. Interestingly, MicroStrategy Bitcoin holdings already surpass MSTR’s $7.9 billion market cap on January 10.
Notably, MSTR shares slightly outperformed BTC in 2023 while showing a correlation on price action. Some experts and investors consider MicroStrategy an indirect exposure to Bitcoin, partially explaining the observed correlation.
However, the scenario changed in the last few days, with the increased expectations of a Bitcoin spot ETF approval. Bitcoin surged to as high as $48,000 as speculators started positioning themselves for an envisioned positive news.
In the meantime, MicroStrategy shares plummeted to $577 on the Nasdaq as investors seeking indirect exposure to BTC might earn different alternatives within the ETFs.
Bitcoin spot ETF approval
The Bitcoin spot ETF approval is one of the most awaited events for the cryptocurrency market in recent years. Investors speculate that traditional finance giants will now deploy capital to gain exposure to the leading cryptocurrency.
Moreover, crypto enthusiasts expect the ETF approval to validate cryptocurrencies as legitimate assets, bringing regulatory clarity to the industry.
In recent weeks, false rumors about the Securities and Exchange Commission’s (SEC) decision triggered volatility and price surges for BTC. On January 9, the SEC account on X (formerly Twitter) was compromised, spreading false news and massive liquidations for traders.
The @SECGov X account was compromised, and an unauthorized post was posted. The SEC has not approved the listing and trading of spot bitcoin exchange-traded products.
— U.S. Securities and Exchange Commission (@SECGov) January 9, 2024
Finally, the agreed deadline for the SEC’s decision has arrived on January 10. All eyes are on the regulator, whose final decision might affect multiple entities, including MicroStrategy Inc., led by Michael Saylor. Further price action will depend on capital flow, and the experts foresee huge volatility amid the coming news.
Disclaimer: The content on this site should not be considered investment advice. Investing is speculative. When investing, your capital is at risk.