There’s a lot of excitement brewing as the long-anticipated Coinbase (NASDAQ: COIN) public offering is about to begin. The cryptocurrency exchange, which was previously valued at almost $100 billion, is quite easily the hottest public offerings this year. Cryptocurrency investors are also feeling excited, with Bitcoin prices surging in anticipation as well. As such, companies that own a lot of Bitcoin, like MicroStrategy (NASDAQ: MSTR), have skyrocketed as well.
MicroStrategy’s CEO, Michael Saylor, happens to be one of the biggest Bitcoin bulls out there right now. He’s gone on to predict that Bitcoin will have a market cap of $100 trillion, and Bitcoin prices could hit $1 million in the next few years. As such, he’s had his company, MicroStrategy, buy up more than $1.5 billion worth of Bitcoin, making the stock one of the best proxy Bitcoin investments out there.
However, a number of brokers have noticed this as well and are taking action. British-based bank HSBC said that it would be banning traders on its stock trading platform from buying any more shares. While current MSTR owners can keep their stock as well as sell whenever they want, new buyers won’t be allowed to purchase any more shares.
“HSBC has no appetite for direct exposure to virtual currencies and limited appetite to facilitate products or securities that derive their value from VCs (virtual currencies),” said HSBC in an official statement.
The bank added that it had designated MicroStrategy as a “virtual currency product,” given that most people are just buying the stock for its Bitcoin ownership. As such, the stock is essentially an indirect way to bet on Bitcoin, hence why the bank is halting all buyers. While it’s mainly just traders in Britain and Canada that have access to HSBC’s platform, this decision is still symbolic of the mainstream financial industry’s reluctance to accept Bitcoin for what it truly is.
Despite the efforts of companies like HSBC, some banks are starting to accept cryptocurrencies. JP Morgan is already beginning to recommend Bitcoin products for its wealthier clientele. At the same time, the Securities and Exchange Commission (SEC) is reviewing several applications for Bitcoin ETFs.
Shares of MicroStrategy are up around 18.2% in anticipation of the upcoming Coinbase IPO, seemingly not caring about this ban from HSBC. Bitcoin prices have already shot up by over 5% on Tuesday in anticipation for Coinbase, and it’s likely that prices will continue to rise throughout Wednesday as well. MicroStrategy could also see big gains as Wednesday’s trading day kicks off. Keep your eye out for other Bitcoin-related stocks as well.
MicroStrategy Company Profile
MicroStrategy Inc is a provider of enterprise analytics and mobility software. It offers MicroStrategy Analytics platform that delivers reports and dashboards and enables users to conduct ad hoc analysis and share insights through mobile devices or the Web; MicroStrategy Server, which provides analytical processing and job management. The company’s reportable operating segment is engaged in the design, development, marketing, and sales of its software platform through licensing arrangements and cloud-based subscriptions and related services. – Warrior Trading News