Bitcoin ETFs Will Hit These Three Crypto Stocks Hard

Original author: Tom Carreras, DL News, original compilation: Luccy, BlockBeats

The launch of Bitcoin ETF marks the beginning of cryptocurrency In a new investment milestone, Bitcoin rose 6% on the day, surpassing the $49,000 mark. But analysts at Maple Finance and North Rock Digital noted that the victory could have a negative impact on some cryptocurrency-related stocks such as Coinbase, Marathon Digital and MicroStrategy. Analysts believe that with the launch of a Bitcoin spot ETF, traditional investors may be more inclined to invest directly in Bitcoin rather than using these stocks. For these companies, they face their own unique challenges, and the cryptocurrency market will enter a new era of competition. BlockBeats compiles the original text as follows:

This morning, a spot Bitcoin ETF launched in the United States—a historic moment that gives investors more access than ever before Easier access to investments in top cryptocurrencies.

But analysts at Maple Finance and North Rock Digital say a Bitcoin victory could ultimately be detrimental to crypto stocks like Coinbase, Marathon Digital and MicroStrategy.

Here’s the crux of the matter: These stocks have historically tended to serve as alternatives to traditional investors seeking Bitcoin exposure without using Bitcoin futures ETFs .

Now that Bitcoin spot ETFs are available in the U.S., analysts say, these investors may "move from these less-than-ideal instruments to the spot they originally wanted." Bitcoin Exposure".

Bitcoin gained 6% today, topping the $49,000 mark before falling back to $46,000. MicroStrategy fell 4%, Coinbase fell 5% and Marathon fell 14%.

Every company is dealing with its own unique challenges.

Inherent resistance

Quinn Thompson, head of capital markets and growth at Maple Finance, told DL News: "There is no doubt that Coinbase is a good business, but ETFs have brought a lot of new competition to the competitive environment."

SEC’s recognition of ETFs is The basis was laid for a price war between different fund managers. Cathie Wood's Ark Invest will charge zero fees in the first year, while BlackRock charges 0.12% for the same period, rising to 0.25% after that.

Coinbase told DL News that it is not worried about competition, although analysts have questioned the exchange's high retail trading fees.

Coinbase has traded more than $2.2 billion worth of Bitcoin in the past 24 hours, according to CoinGecko, a figure that is in line with expected inflows into the ETF.

Thompson said: "Some estimates call for $2 billion to $4 billion in inflows in the first few days of trading in the new Bitcoin ETF." This is a serious violation of America’s previously large moats.”

Meanwhile, Bitcoin mining companies like Marathon must contend with the upcoming halving , that is, the Bitcoin network will cut Bitcoin mining rewards in half. Halvings occur every four years, with the next one currently expected in April.

As Bitcoin block rewards are halved, miners' income will drop significantly, while their huge energy costs will remain the same or even continue to climb.

Thompson said: "The halving poses a serious risk to profitability that can only be achieved by increasing prices (by my estimate over $75,000) or increasing trading activity and fees. (at least two or three times current levels) to resolve."

"Higher-cost producers may be able to respond in the months after the halving We are facing some difficulties internally," he added.

While Marathon is one of the largest Bitcoin mining companies in the world, its electricity costs are also among the highest in the industry, according to an October report from J.P. Morgan of.

"This will force miners to issue more equity to expand their runway and dilute existing shareholders. This is a tried and true strategy they continue to employ, Don't be that surprised," Thompson said.

"Gold ETFs and gold miners both exist on the open market, and people invest in them for different reasons. If they can coexist, why should Bitcoin ETFs and Bitcoin What if coin miners can't coexist?" Charlie Schumacher, Marathon's vice president of corporate communications, told DL News.

Schumacher added: "Overall, we think this event is very positive for the industry, as it may attract more people into the field , resulting in a bigger pie for everyone."

In the case of MicroStrategy, its shares are currently trading relative to the fundamentals of the business, the report said. There is a significant premium to the book value, which is the value of the operating company and the value of its holdings of 189,150 Bitcoins.

However, analysts said the uncertainty surrounding MicroStrategy’s possible sell-off of its Bitcoin holdings, coupled with co-founder Michael Saylor’s recent sale of company stock, and the risk of additional downside pressure, making this investment riskier than simply accessing a Bitcoin ETF.

The report compared MicroStrategy to Grayscale's Bitcoin Trust, which also traded at a premium for years, "but when the asset was replaced by better alternatives When stocks fall out of favor due to bad news and souring sentiment, they reverse course and trade at a discount."

Coinbase and MicroStrategy did not immediately respond to requests for comment.