MicroStrategy to Retain Bitcoin Appeal Despite Bitcoin ETF Approval

Jimmy Aki
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Michael Saylor, the CEO of MicroStrategy Inc., has asserted that regardless of potential future exchange-traded fund approvals, investors are likely to persist in perceiving his software company as a Bitcoin proxy.

Saylor’s Confidence Remains High

As the crypto world continues to evolve and gain mainstream acceptance, recent developments in the financial markets have sparked a fervent debate over the approval of Bitcoin exchange-traded funds (ETFs).

One notable player in the crypto space, Michael Saylor, the CEO of MicroStrategy, is confident that his company will continue to be an appealing investment option for those interested in Bitcoin, even if exchange-traded fund approvals are granted in the future.

Microstrategy, located in Tysons Corner, Virginia, is the biggest publicly-traded owner of Bitcoin.

During a Bloomberg Television interview, Saylor expressed his belief that a spot Bitcoin ETF would benefit all Bitcoin-related companies, attracting substantial investments from large hedge funds and other entities.

According to Saylor, despite numerous asset managers, including BlackRock, seeking ETF approval, MicroStrategy has advantages, such as not imposing any investment fees.

He likened MicroStrategy to a sports car and the spot ETF to a supertanker, emphasizing that the company’s operational model, which allows them to use leverage, is advantageous for the entire Bitcoin ecosystem.

Nevertheless, he recognized the potential for a spot Bitcoin ETF to draw substantial investments from prominent hedge funds and sovereign entities.

Despite the arrival of spot ETFs, Saylor believes they will complement MicroStrategy’s strategy and contribute to the growth of the entire asset class.

Furthermore, in a Q2 result earnings results released on August 1st, MicroStrategy reported a substantial turnaround in its financial performance, with a net income of $22.2 million.

This is in stark contrast to the $1.1 billion net loss reported in the same period last year. Despite this significant improvement, total revenues remained relatively unchanged at $120.4 million.

Furthermore, MicroStrategy made its most substantial Bitcoin acquisition since prices peaked in late 2021, purchasing approximately $361.4 million worth of the cryptocurrency in the second quarter.

According to the company’s report, its Bitcoin purchases amounted to approximately $4.53 billion, adding to MicroStrategy’s holdings. As of July 31st, MicroStrategy held 152,800 Bitcoin.

Aside from that, on August 1st, the company issued another SEC filing, wherein they disclosed their intention to raise funds by selling stocks amounting to $750 million. This stock sale aims to facilitate the acquisition of Bitcoin and pursue other corporate objectives.

According to data shared by Fintel, a prominent company offering financial data and insights to smart, data-driven investors, Microstrategy boasts more than 471 institutional shareholders and a market capitalization of $5.3 billion.

This puts the company as a major player in the Bitcoin investment arena.

ETF Analyst Sees 65% Bitcoin ETF Approval Chances In The US

The filing spree for spot Bitcoin ETFs commenced when BlackRock submitted its application to the SEC on June 15th.

Subsequently, WisdomTree, Invesco, Valkyrie, and other major institutional players followed suit.

Bloomberg analysts Eric Balchunas and James Seyffart noted that the likelihood of a Bitcoin ETF gaining approval has significantly risen in the past month.

According to them, the probability of a spot Bitcoin exchange-traded fund (ETF) being approved in the United States has risen from a mere 1% just a couple of months ago to a current estimation of 65%.

This increase in chances is attributed to various new developments in the crypto market and major players like BlackRock resubmitting ETF applications.

Seyffart pointed out that the outcome of the Grayscale case and its timing will heavily influence the recent boost in approval chances.

He added that the success of Grayscale against the SEC in Federal court could lead to a domino effect, resulting in multiple spot Bitcoin ETF approvals by the end of the fourth quarter.

The surge in filings during the second quarter of 2023 occurred despite the SEC’s previous rejections of all spot ETF applications.

Overall, many market analysts believe 2023 could be a pivotal year for the approval of spot Bitcoin ETFs.

About Jimmy Aki PRO INVESTOR

Based in the UK, Jimmy is an economic researcher with outstanding hands-on and heads-on experience in Macroeconomic finance analysis, forecasting and planning. He has honed his skills having worked cross-continental as a finance analyst, which gives him inter-cultural experience. He currently has a strong passion for regulation and macroeconomic trends as it allows him peek under the global bonnet to see how the world works.