HSBC snubs MicroStrategy stock after CEO buys too much Bitcoin
HSBC has reiterated it has “no appetite” for digital assets after barring customers from buying stock in Bitcoin-forward business intelligence company MicroStrategy.
On Tuesday, Europe’s largest bank confirmed earlier reports that InvestDirect no longer supports purchase of MicroStrategy shares. HSBC InvestDirect traders can now only hold or sell their existing MSTR positions.
London-headquartered HSBC effectively reasoned that MicroStrategy now derives too much of its value from Bitcoin.
The company’s chief exec Michael Saylor has so far spent $2.26 billion on the cryptocurrency since August last year, according to Bitcoin Treasuries, giving MicroStrategy the largest Bitcoin stash of any public company.
“HSBC has no appetite for direct exposure to virtual currencies and limited appetite to facilitate products or securities that derive their value from virtual currencies,” said HSBC in an email.
Protos understands HSBC has held similar rules since 2018.
In January, The Times reported HSBC had restricted customers from depositing cash from crypto exchanges into UK accounts — making it difficult for crypto traders to bank their profits.
MicroStrategy stock tethered to Bitcoin’s price
HSBC’s MicroStrategy sentiment isn’t without precedent. Citibank analyst Tyler Radke referred to Saylor’s Bitcoin fascination as “disproportionate focus” in December.
And while both BTC and MSTR are way up on December, Seeking Alpha noted in March that MSTR’s share price is extra sensitive to Bitcoin dumps, and highlighted MSTR had fallen 13% when BTC dropped less than 6%.
[Read more: MicroStrategy owns more Bitcoin than every other public company combined]
Despite this, MicroStrategy’s Saylor continues to be bullish on Bitcoin.
Last week, Saylor announced the company paid $15 million for 253 BTC ($16 million). This brought MicroStrategy’s stash to 91,579 BTC ($5.77 billion).
Elsewhere, Wall Street old guards JPMorgan and Goldman Sachs are warming to crypto. However, they’re still only expected to offer Bitcoin exposure to their wealthiest clients.