Strategy's recently boosted cash reserves and positive flows into bitcoin futures are "encouraging signs" for the bitcoin outlook, even as spot bitcoin exchange-traded fund flows remain volatile, according to JPMorgan analysts.
Spot bitcoin ETF flows have been erratic in recent weeks, with inflows last week followed by outflows this week, the analysts led by managing director Nikolaos Panigirtzoglou said in a Wednesday report. By contrast, flows into leveraged ETFs tied to Strategy have remained steadier and positive over the past seven weeks, the analysts noted.
The analysts said the buying, which they attributed largely to retail investors, has likely supported Strategy's share price and prevented its common stock (MSTR) from trading below the net asset value of its bitcoin holdings.
At the same time, Strategy recently increased its U.S. dollar reserves from $2.55 billion to $3 billion, equivalent to about 20 months of preferred dividend payments.
"This is an encouraging sign for the bitcoin outlook, in our view," the analysts said.
