MicroStrategy (MSTR) has seen its stock price climb over 350% in 2023, largely due to expectations surrounding the approval of a spot Bitcoin exchange-traded fund (ETF) in the United States. At the time of writing, MSTR is trading at $654, up 8.3% intraday. 

The company’s massive exposure to Bitcoin ( BTC ) is backing its stock performance. MicroStrategy and its subsidiaries hold 189,150 BTC, representing a combined purchase price of approximately $5.9 billion and an average purchase price of $31,168 per BTC, according to a report from Cointelegraph .

MicroStrategy’s stock surges 350% in 2023 on back of Bitcoin ETF hype image 0

MicroStrategy exposure's to the cryptocurrency is leading some analysts to label its stock as "essentially a leveraged Bitcoin ETF."  According to an analysis from Seeking Alpha based on the company's quarterly earnings, a combination of long-term, low-interest debt and share issuance has been used to finance the company's BTC purchases.

As of Sept. 30, MicroStrategy's total liabilities were at $2.534 billion, a 7.7% decline year-over-year, with long-term liabilities adding up to $2.180 billion.

"The senior convertible notes aren't due until December 2025. From Saylor's perspective, it's unwise to save in a fiat currency that is perpetually debased when he can instead put the company's treasury in a liquid asset that doesn't suffer from dramatic supply inflation," reads the analysis. Senior convertible notes are a type of debt instrument used by companies to raise capital.

MicroStrategy provides business intelligence, mobile software, and cloud-based services. Its main product is a platform for data analytics, used by businesses for data visualization. The company's growing exposure to Bitcoin also leaves its balance sheet more closely tied to the volatility and risks of the crypto markets.

The prospect of spot BTC ETFs trading on Wall Street is also fueling the cryptocurrency's price. Despite tight macroeconomic conditions and headwinds in the crypto industry, Bitcoin's price  has gained more than 160% in 2023 , outperforming major traditional assets. Spot trading means buying or selling Bitcoin instantly at current market prices.

The U.S. Securities and Exchange Commission  is expected to decide in early January on allowing Bitcoin spot trading through ETFs, with major firms like Fidelity and BlackRock in the running. Approval could boost Bitcoin’s prices and market liquidity by opening the cryptocurrency to a broader audience of investors.

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