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Bitcoin ETF to severely impact these three cryptocurrency stocks.

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The ultimate victory of Bitcoin may ultimately be detrimental to cryptocurrency stocks such as Coinbase, Marathon Digital, and MicroStrategy.

Original Title: "Bitcoin ETFs will clobber these three crypto stocks"

Original Author: Tom Carreras, DL News

Translated by: AI Assistant

Editor's Note:

The launch of Bitcoin ETFs marks a new milestone in cryptocurrency investment, with Bitcoin rising 6% on the day and breaking through the $49,000 mark. However, analysts at Maple Finance and North Rock Digital point out that this victory may have a negative impact on some cryptocurrency-related stocks, such as Coinbase, Marathon Digital, and MicroStrategy.

Analysts believe that with the launch of Bitcoin spot ETFs, 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 has translated the original article as follows:

This morning, the spot Bitcoin ETF was launched in the United States - this is a historic moment that makes it easier for investors to invest in top cryptocurrencies than ever before.

However, analysts from Maple Finance and North Rock Digital suggest that Bitcoin's victory may ultimately be detrimental to cryptocurrency stocks such as Coinbase, Marathon Digital, and MicroStrategy.

The key issue is that these stocks have often served as alternatives to traditional investors in history, who seek exposure to Bitcoin without using Bitcoin futures ETFs.

Analysts say that since the Bitcoin spot ETF is listed in the United States, these investors may "turn to the spot Bitcoin exposure they originally wanted from these less-than-ideal tools."

Bitcoin rose 6% today, breaking through the $49,000 mark, and then fell to $46,000. MicroStrategy fell 4%, Coinbase fell 5%, and Marathon fell 14%.

Every company is facing its own unique challenges.

Internal Resistance

Maple Finance Capital Markets and Growth Manager Quinn Thompson 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."

The SEC's approval of ETFs has laid the foundation for a price war among different fund managers. Cathie Wood's Ark Invest will charge zero fees in the first year, while BlackRock will charge 0.12% during the same period, which will later increase to 0.25%.

Coinbase told DL News that despite analysts questioning the exchange's high retail transaction fees, it is not worried about competition.

According to data from CoinGecko, Coinbase traded over $2.2 billion worth of Bitcoin in the past 24 hours, which is equivalent to the expected inflow of ETFs.

Thompson said: "Some estimates require a capital inflow of $2 billion to $4 billion in the first few days of trading for the new Bitcoin ETF. This is a serious violation of the previous large-scale moat in the United States."

At the same time, bitcoin mining companies like Marathon must prepare for the upcoming halving, where the bitcoin network will cut mining rewards in half. Halving occurs every four years, with the next one expected in April.

With the halving of Bitcoin block rewards, miner income will significantly decrease, while their enormous energy costs will remain unchanged, or even continue to rise.

Thompson said: "Halving poses a serious risk to profitability, which can only be addressed by raising prices (I estimate over $75,000) or increasing trading activity and fees (at least two or three times current levels)."

"High-cost producers may face some difficulties in the months following the halving," he added.

According to a report by JPMorgan in October, although Marathon is one of the world's largest Bitcoin mining companies, its electricity costs are also the highest in the industry.

"This will force miners to issue more equity to expand their runway and dilute existing shareholders. This is a proven strategy they have been continuously adopting, so don't be too surprised," said Thompson.

"Gold ETFs and gold miners both exist in the public market, and people invest in them for different reasons. If they can coexist, why can't Bitcoin ETFs and Bitcoin miners coexist?" Charlie Schumacher, Vice President of Corporate Communications at Marathon, told DL News.

Schumacher added: "Overall, we believe that this event is very positive for the industry because it may attract more people to enter this field, thereby bringing a bigger cake for everyone."

According to the report, for MicroStrategy, the current trading price of its stock is significantly higher than the fundamental book value of its business, which includes the value of the operating company and the value of the 189,150 bitcoins it holds.

However, analysts say that the uncertainty surrounding MicroStrategy's potential sale of its Bitcoin holdings, combined with co-founder Michael Saylor's recent sale of company stock and the risk of additional downward pressure, makes this investment riskier than simply obtaining exposure to Bitcoin through a Bitcoin ETF.

This report compares MicroStrategy with Grayscale's Bitcoin Trust, which has also traded at a premium for many years, "but when the asset falls out of favor due to better alternatives and deteriorating sentiment, it will reverse and trade at a discount."

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