While anticipation for an official ETF approval is high, MicroStrategy’s CEO Michael Saylor remains concerned despite the company’s significant Bitcoin holdings. MicroStrategy, a technology firm led by dotcom-era figure Michael Saylor, is the largest corporate holder of Bitcoin, with 189,150 BTC purchased at an average price of $31,168 as of December 27, 2023.
Saylor has effectively been managing an unofficial spot Bitcoin ETF through his company’s massive Bitcoin reserves. Investors indirectly invest in Bitcoin by purchasing MicroStrategy’s stock (MSTR) or by acquiring shares of companies like Coinbase and mining firms.
MicroStrategy’s stock has been preferred by investors due to its substantial BTC accumulation, and the company’s shares are held by large asset management firms on behalf of their clients, as seen in the provided image.
An ETF approval could pose challenges for MicroStrategy. Should an ETF be approved, investors might question the rationale behind taking additional risks with MSTR shares when they can directly invest in an ETF. According to Blockchain Capital’s analyst, an ETF approval could initially benefit MicroStrategy by increasing its stock price due to its Bitcoin exposure, but a shift to ETFs could lead to a decrease in share prices.
MicroStrategy’s shares are considered to be at a 30% premium compared to direct Bitcoin exposure. The potential for smaller price discrepancies in ETFs may drive investors to sell MSTR and opt for Bitcoin ETFs like IBIT. This shift could eventually prompt Saylor to start selling Bitcoin, despite his previous assertions that MicroStrategy offers leverage without fees, positioning itself as a high-performance vehicle for long-term Bitcoin investors.
