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As the price of Bitcoin approached the psychological level of $46,000 on January 2, shares of Coinbase (COIN) and MicroStrategy (MSTR) surged 6% and 9%, respectively.
Bitcoin price rose 7%, pushing COIN to an intraday high of $187.29 and MSTR to $689.35.
The surge in Bitcoin prices is due to expectations that the approval of the BTC spot exchange-traded fund (ETF) will be imminent. This follows a Reuters report that a decision from the U.S. Securities and Exchange Commission (SEC) could come between January 2 and 3.
The SEC may notify issuers on Tuesday or Wednesday that it has approved the launch of a spot Bitcoin ETF next week.
through @Reuters pic.twitter.com/Tj0QWrpfkv
— Nate Geraci (@NateGeraci) December 30, 2023
Why COIN stock prices are soaring along with Bitcoin prices
The surge in COIN stock comes in part because the Coinbase exchange has been listed by several spot BTC ETF filers for the Surveillance Share Agreement (SSA).
Among the companies that will use Coinbase for SSA are BlackRock and Fidelity.
Gensler was asked about Coinbase being at the center of ETF filings during today’s webinar. He could not comment on the filing, but he was quite negative, saying the cryptocurrency exchange operates “conflicting services” and has “limited risk monitoring.” @The Block__ pic.twitter.com/iCVl906GyF
— Eric Balchunas (@EricBalchunas) July 12, 2023
Coinbase’s influence as the largest exchange in the US means that it handles a significant portion of US-based and USD-denominated Bitcoin transactions.
Create a MicroStrategy case
In the case of MicroStrategy, the surge comes as the investment firm is one of the largest BTC holders, giving many investors indirect exposure to Bitcoin.
In the final week of 2023, the company revealed that it added 14,620 BTC to its portfolio between November 30 and December 26, worth about $615 million at the time.
MicroStrategy acquired an additional 14,620 BTC for approximately $615.7 million, at an average price of $42,110. #Bitcoin. As of December 26, 23, @MicroStrategy Currently has 189,150 people $BTC It was acquired for approximately $5.9 billion, at an average price of $31,168 per Bitcoin. $MSTR https://t.co/PKfYY59sTW
— Michael Saylor⚡️ (@saylor) December 27, 2023
The addition brings the company’s holdings to 189,150 bitcoins, worth about $8.7 billion at current prices. They were purchased at an average price of $31,168, giving the investment firm a paper profit of more than $2.8 billion on its current holdings.
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