(Bloomberg) -- MicroStrategy Inc. Chairman Michael Saylor’s strategy of buying Bitcoin may be coming into question as the advent of exchange-traded funds holding the largest cryptocurrency appears imminent.

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Saylor has turned the once struggling software company into a Bitcoin proxy for equity investors by accumulating more than $5.5 billion of the cryptocurrency since the middle of 2020. During that time, shares of MicroStrategy have more than tripled as Bitcoin surged in value. The benchmark Standard & Poor’s 500 Index gained about 40% during the same period.

Now with the US Securities and Exchange Commission seeming likely to approve ETFs that invest directly in Bitcoin after a key court loss earlier this year, investors and analysts are beginning to debate whether MicroStrategy’s shares will continue to command a premium. Even MicroStrategy, which releases quarterly results later Wednesday, has raised the question in a recent filing.

“To the extent that our Class A common stock is viewed as an alternative-to-Bitcoin investment vehicle and trades at a premium to the value of our Bitcoin holdings, that premium may also be eliminated, causing the price of our Class A common stock to decline,” the Tysons Corner, Virginia-based company wrote in an Aug. 1 filing.

Saylor began buying Bitcoin in 2020, citing the need to reduce the company’s holdings of cash because of the perceived eroding threat of inflation. The shift came as revenue from the software business stagnated. Saylor gave up his chief executive officer title last year, saying he would focus on the Bitcoin aspect of the company’s dual strategy.

TD Cowen analyst Lance Vitanza estimates that MicroStrategy’s shares garner a premium of about 30% over the enterprise value of the company because of its horde of 158,245 Bitcoin as of September. The premium could shrink to 15% to 25% if the SEC approves the ETFs in coming months, he said.

“It’s going to go down, but it’s not going to go to zero,” said Vitanza, who has an “outperform” rating on MicroStrategy.

Vitanza takes comfort in the belief that the approval of ETFs will kick off a rally in Bitcoin’s price — and that, in turn, will offset a reduction in the premium by boosting the share price. MicroStrategy will remain attractive because of the underlying software business, as well as its ability to borrow against its holdings to buy more Bitcoin, he said.

“The creation of a spot ETF will trigger several tens of billions of dollars to be invested into Bitcoin,” Vitanza said. “We think that yes, the premium embedded into MicroStrategy stock will go down, but it will be more than offset by the increase in the price of Bitcoin.”

MicroStrategy is expected to report third-quarter revenue of $125.8 million and earnings before charges such as taxes of $25.3 million, according to analysts surveyed by Bloomberg. That’s about the same amount of revenue as from the year-ago period. Ebidta was $8.2 million.

--With assistance from Tom Contiliano.

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