Spot Bitcoin ETFs vs MicroStrategy, What’s A Better BTC Proxy Bet?

The spot Bitcoin ETF inflows have surged once again after a dull start to the month of October. On Monday, the US BTC ETFs saw $555 million in inflows scooping 8,359 Bitcoins from the open market. This comes as US indices continue to show strength amid improving macros. Additionally, investors are arguing that BTC ETFs are a better way of seeking exposure to Bitcoin instead of MicroStrategy, as the latter’s valuation looks pricy considering the firm’s $15.5 billion Bitcoin holdings.

Spot Bitcoin ETF vs MicroStrategy

The massive inflows into spot Bitcoin ETFs show potential institutional demand for the investment product. On Monday, Fidelity’s FBTC led the ETF market with $239.3 million in inflows followed by Bitwise’s BITB at $100.2 million in inflows. BlackRock’s IBIT came third at $79.5 million inflows, as per Farside Investors.

These inflows came as the BTC price bounced back all the way to $66,000 earlier today breaching crucial resistance levels. Interestingly, yesterday’s inflows into spot Bitcoin ETFs mark the highest in over four months since June 5, 2024, and the eighth largest daily inflow since the launch in January.

Besides, investors have started comparing spot BTC ETFs to MicroStrategy (MSTR) as a proxy bet on the world’s largest digital asset. Following a huge rally over the past week to its all-time high above $220 levels, the MicroStrategy stock plunged by 5.1% on Monday.

Market analysts remain divided as to what is a better proxy bet for Bitcoin – the spot BTC ETFs or MicroStrategy. Nate Geraci, the President of ETF Store wrote:

“ETFs provide the same exposure without relying on the continuation of a fragile valuation premium.”

Currently, MicroStrategy’s total Bitcoin holdings are worth $15.5 billion while the company valuation is at $42 billion i.e. 2.7x. Some market analysts have been raising concerns of overvaluation in MSTR against its Bitcoin holdings.

However, “Bitcoin Guy” Rajat Soni has justified the valuations by stating that MSTR offers higher risk-adjusted returns than spot Bitcoin ETFs. Recently Michael Saylor shared his bold plans of converting MicroStrategy into the first trillion-dollar Bitcoin bank.

Larry Fink – Bitcoin Will Be Greater Than US Housing Market

In his latest interview, BlackRock CEO Larry Fink stated that Bitcoin will be as huge as the US housing market. This is a massive statement considering the fact that the size of the US housing market is at $50 trillion.

The housing market could reach $100 trillion by 2040. That’s 76 times Bitcoin’s current market cap of $1.3 trillion. In other words, Bitcoin could hit $5 million, according to one of the most influential figures in global finance. Thus, the inflows so far into spot Bitcoin ETF are just the beginning of the larger picture ahead.