Better Crypto Exposure with MicroStrategy Shares: Berenberg

Better Crypto Exposure with MicroStrategy Shares: Berenberg

Investors seeking exposure to the cryptocurrency sector should consider MicroStrategy (MSTR) as a bullish alternative to Coinbase (COIN), as the macro drivers of demand for bitcoin are favorable for MicroStrategy shares, according to a report by Germany investment bank Berenberg.

Macro drivers of demand for Bitcoin (BTC) are positive  tendency for MicroStrategy shares, the report stated.

MicroStrategy (MSTR) represents an attractive alternative to Coinbase Crypto exchange (COIN) for investors looking to win exposure to the digital currency sector, Germany financing bank Berenberg stated in a report Monday.

Investors who are very bearish on Coinbase Crypto exchange shares and are inclined to short the stock should look at pairing it with long MicroStrategy, the report stated, keeping in mind that the correlation betwixt the two stocks since Coinbase Crypto exchange went public via a direct listing in April 2021 is 0.96.

The United States Securities and Exchange Commission (SEC) has characterized most cryptocurrency crypto tokens as unregistered securities, rendering them, and the platforms that enable the trading of these digital assets, as vulnerable to further regulatory actions, the note stated. The commission and other regulatory authorities have been clear in classifying Bitcoin (BTC) (BTC) as a commodity rather than a security, the note added.

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“We believe MicroStrategy, which features a unique business model focused on the acquisition and holding of bitcoins, represents an attractive alternative to Coinbase Crypto exchange in the present environment,” analysts Mark Palmer and Hassan Saleem wrote.

Microstrategy as of now holds 140,000 Bitcoin worth around $3.8 Billion at current prices.

Berenberg reveals macro drivers of demand for Bitcoin (BTC) are positive  tendency for MicroStrategy shares, and investor concerns over de-dollarization – or the weakening of the United States dollar’s dominance – have helped to put a more positive spotlight on Bitcoin (BTC) in recent months.

Recent comments from SEC Commissioner Gary Gensler regarding Coinbase Crypto exchange leave little doubt as to his view of the company’s noncompliance with securities laws and management’s “defiant tone” regarding the scrutiny it has received will potentially serve as an accelerant of the filing of any enforcement action, the analysts wrote.

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“Coinbase’s revenues at danger in the event of an enforcement action are disproportionately profitable relative to its total revenue,” the report added.

The bank has a hold rating on Coinbase Crypto exchange shares with a price target of $55. MicroStrategy is buy-rated with a $340 price target.


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