Bullish for Bitcoin? These financial giants buy $75 million in MicroStrategy stock
Photo by: Giovanni Calia – Unsplash
Software company MicroStrategy is getting attention from major players in the financial world because of its Bitcoin venture. Almost three years ago, this company became one of the first listed entities in the United States to integrate BTC into its financial strategy. Since then, it has continued to add BTC to its treasury.
Looking for a way to gain exposure to Bitcoin
Data from Bitcoin Treasuries indicates that MicroStrategy has the largest BTC supply of any publicly traded company at $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 United States to gain exposure to Bitcoin. In this country, large entities have limited opportunities to bet on BTC’s long-term appreciation.
The US 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.
These companies include financial institution Bank of America, which bought over 226,506 MicroStrategy shares, and fund and asset managers BlackRock and Fidelity, which bought 10,800 and 96,800 shares respectively in Q1 2023 alone.
Capital Research and The Vanguard Group are two of MicroStrategy’s largest shareholders and remain bullish on the company, with 154,100 and 28,000 shares bought in the same period. The capital contribution received by MicroStrategy has influenced the price.
The company is tied to the price of Bitcoin. Thus, it has seen a downtrend over the past year, but continues to trend well above the 2020 low of around $110 following the Bitcoin treasury strategy. The correlation is poised to benefit the software company and its investors if BTC can continue to climb from its yearly lows.
In 2020, MicroStrategy started a trend that has been strengthening even as BTC’s price trends have been declining. The number of companies holding the 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 push more companies to adopt the cryptocurrency.
