JPMorgan: Leveraged MicroStrategy ETFs Are Having a Growing Impact on Stock and Crypto Markets
JPMorgan (JPM) stated in a research report on Wednesday that the increasing size of leveraged MicroStrategy (MSTR) exchange-traded funds (ETFs) and the inflows they attract are exerting a more significant influence on both the company’s stock and the broader crypto markets.
The report highlighted that these ETFs played a major role in driving MicroStrategy’s stock price nearly 60% higher in November. During the month, a record $11 billion flowed into U.S. spot bitcoin (BTC), spot ether (ETH), and leveraged MicroStrategy ETFs combined. Of this total, $3.4 billion—almost a third—was attributed to the leveraged MSTR ETFs.
“This underscores the growing impact of MicroStrategy’s leveraged ETFs in the crypto market, especially through their role in supporting the company’s bitcoin acquisition strategy,” wrote analysts, led by Nikolaos Panigirtzoglou.
MicroStrategy, founded by Michael Saylor, has spent $13 billion on bitcoin purchases this quarter alone, according to the report.
The growth of these ETFs is driven by rising investor demand for leveraged exposure to bitcoin via ETFs, a product not typically available to retail investors. These ETFs provide a route for investors, who are restricted from directly purchasing spot bitcoin ETFs, to gain exposure to the cryptocurrency. Additionally, MicroStrategy’s inclusion in major benchmarks, like the MSCI World index, leads to substantial passive flows into its stock.
The report also pointed out that investor optimism regarding MicroStrategy’s corporate strategy, which includes plans to become a bitcoin bank and develop BTC applications, has added a premium to its stock price, further driving its valuation.
Currently, MicroStrategy meets the eligibility requirements for inclusion in the Nasdaq-100 index, according to Benchmark analyst Mark Palmer.
