No Bitcoin, Please: MicroStrategy Gets HSBC Ax
What Happened: HSBC said it will not facilitate the buying or exchange of products related to or referencing the performance of virtual currencies, according to the report that cited a message to a client on the bank’s InvestDirect stock trading platform.
The message reportedly referred to MicroStrategy’s stock as a “virtual currency product.”
While HSBC will allow the holding, sale, and outgoing transfer of MicroStrategy shares, it will forbid new purchases or incoming transfers, as per the report.
MicroStrategy, a Virginia-based business software firm, is led by Bitcoin proponent Michael Saylor, and owns bitcoin worth billions of dollars. Saylor said in March that one of his tweets played a pivotal role in Tesla Inc.’s (NASDAQ:TSLA) $1.5 billion investment in Bitcoin.
Why It Matters: HSBC’s decision is part of a broader move by the bank to limit cryptocurrency trading. However, the move comes against the growing number of financial firms and companies that are embracing cryptocurrencies.
JPMorgan Chase & Co. (NYSE:JPM) revealed earlier it would be launching Cryptocurrency Exposure Basket – a debt instrument with positions in 11 companies. The debt instrument allocates 20% to MicroStrategy and 18% to Jack Dorsey-led Square Inc. (NYSE:SQ) – two companies that declared their Bitcoin investments early on.
See also: HSBC InvestDirect Review
MicroStrategy said in a regulatory filing last week it held about 91,579 bitcoins that were acquired at an aggregate purchase price of $2.226 billion and an average purchase price of about $24,311 per bitcoin.
Price Action: HSBC shares closed 0.5% lower on Monday at $29.74, while MicroStrategy shares closed more than 1% higher at $718.24. Bitcoin traded 2.1% higher at $61,377 at press time on Tuesday.
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