[Will MicroStrategy Stock Be Impacted by Bitcoin ETF Approval? 】
As a company that holds large reserves of Bitcoin (Bitcoin), MicroStrategy Inc. (NASDAQ: MSTR ) is considered an indirect Bitcoin spot ETF. Stock markets are now eyeing the potential approval of a Bitcoin ETF, fearing the negative impact it could have on MSTR stock due to outflows.
As of December 27, 2023, MicroStrategy’s holdings of 189,150 Bitcoins were worth approximately $8.5 billion, which has exceeded the company’s market capitalization of $7.9 billion on January 10.
Notably, MSTR stock has slightly outperformed Bitcoin in 2023, with the price action of the two showing a correlation. Experts and investors believe that MicroStrategy is an indirect way to invest in Bitcoin, which goes some way to explaining its price correlation.
That changed in recent days as expectations for the approval of a Bitcoin spot ETF grew. Bitcoin prices surged to $48,000 as investors adjusted in anticipation of the good news.
Meanwhile, MicroStrategy shares fell to $577 on the Nasdaq, likely as investors seeking indirect Bitcoin exposure turned to ETFs as an alternative investment avenue.
The approval of a Bitcoin spot ETF is seen as one of the most anticipated events in the cryptocurrency market in recent years. Investors speculate that traditional financial institutions will pour money into gaining exposure to the leading cryptocurrency. Additionally, crypto enthusiasts hope that the approval of the ETF will provide confirmation that cryptocurrencies are legitimate assets, bringing regulatory clarity to the entire industry.
Rumors surrounding a decision by the U.S. Securities and Exchange Commission (SEC) have fueled Bitcoin’s volatility and price surge in recent weeks. On January 9, the SEC’s account on X was hacked, spreading false news and causing traders to liquidate their positions in large numbers.
Now, all eyes are on the SEC's upcoming decision, which could impact multiple entities including Michael Saylor-led MicroStrategy Inc. Experts expect the direction of money flows to determine future price action and expect huge moves on the incoming news.
