Bullish For Bitcoin? These Financial Giants Buy $75 Million In MicroStrategy Shares
Software company MicroStrategy is getting attention from major players in the financial world due to its bet on Bitcoin. Almost three years ago, this company became one of the first publicly traded entities in the US to integrate BTC into its financial strategy. Since then, it has continued to add BTC to its treasury.
Looking for a way to get exposure to Bitcoin
Data from Bitcoin Treasuries indicates that MicroStrategy holds the largest supply of BTC for any publicly traded company with $3.9 billion or 140,000 BTC. This represents 0.66% of the entire Bitcoin supply.
As a result, buying MicroStrategy stock is a proxy used by companies in the US to gain exposure to Bitcoin. In this country, large entities have limited options to bet on BTC appreciation in the long term.
The U.S. Securities and Exchange Commission (SEC) has refused to approve a spot Bitcoin Exchange Traded Fund (ETF), forcing companies to gain indirect exposure. As shown in the chart below, several companies are using this strategy.
Those companies include financial institution Bank of Americaa, which purchased more than 226,506 shares of MicroStrategy, and fund and asset managers BlackRock and Fidelity, which purchased 10,800 and 96,800 shares, respectively, in the first quarter of 2023 alone.
Capital Research and The Vanguard Group are two of MicroStrategy’s biggest stockholders and are still bullish on the company, with 154,100 and 28,000 shares purchased over the same period. The capital injection received by MicroStrategy impacted its price.
The company is pegged to the price of Bitcoin. Thus, it trended down last year but remains well above the 2020 low of around $110 following its Bitcoin treasury strategy. The correlation is poised to benefit the software company and its investors if BTC continues to rise from its annual lows.
In 2020, MicroStrategy started a trend that strengthened even as BTC prices plummeted. The number of companies that have cryptocurrency as part of their treasury has increased exponentially since 2018.
Now, for the first time in months, the company has announced new BTC purchases and a new edition of its Bitcoin and Lightning for Corporations events. It remains to be seen whether the event can lead more companies to adopt cryptocurrency.