MicroStrategy (MSTR) represents an attractive alternative to Coinbaseย Cryptoย exchange (COIN) for investors looking toย win exposure to the digitalย currency sector, Germany financing bank Berenberg stated in a report Monday.
Investors who are very bearish on Coinbaseย Cryptoย exchange shares and are inclined to short the stock should look at pairing it with long MicroStrategy, the report stated, keepingย inย mindย that the correlation betwixt the two stocks since Coinbaseย Cryptoย exchange went public via a direct listing in April 2021 is 0.96.
The Unitedย States Securities and Exchange Commission (SEC) has characterized most cryptocurrency cryptoย 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 regulatoryย authorities have been clear in classifying Bitcoinย (BTC) (BTC) as a commodity rather than a security, the note added.
โWe believe MicroStrategy, which features a unique business model focused on the acquisition and holding of bitcoins, represents an attractive alternative to Coinbaseย Cryptoย exchange in theย present environment,โ analysts Mark Palmer and Hassan Saleem wrote.
Microstrategy asย ofย now holds 140,000 Bitcoin worth around $3.8 Billion at current prices.
Berenberg reveals macro drivers of demand for Bitcoinย (BTC) are positiveย tendency for MicroStrategy shares, and investor concerns over de-dollarization โ or the weakening of the Unitedย States dollarโs dominance โ have helped to put a more positive spotlight on Bitcoinย (BTC) in recent months.
Recent comments from SEC Commissioner Gary Gensler regarding Coinbaseย Cryptoย exchange leave little doubt as to his view of the companyโs noncompliance with securities laws and managementโs โdefiant toneโ regarding the scrutiny it has received will potentially serve as an accelerant of the filing of any enforcement action, the analysts wrote.
โCoinbaseโs revenues at danger in the event of an enforcement action are disproportionately profitable relative to its total revenue,โ the report added.
The bank has a hold rating on Coinbaseย Cryptoย exchange shares with a price target of $55. MicroStrategy is buy-rated with a $340 price target.
