Many institutional investors are jumping in new trade to gain Bitcoin exposure. According to several experts, software company MicroStrategy’s shares (MSTR) have become a proxy for a BTC Exchange Traded Fund (ETF).
The company has purchase over 100,000 BTC and its shares seem to be highly correlated with the Bitcoin price performance. Over the years, the SEC has denied all Bitcoin ETF petitions. Thus, investors have had to find alternatives, especially during the last years when its price skyrocket from $4,000 (yearly low) to over $60,000.
Per an SEC filing, the titan Capital International Investors a U.S.-based division of investment firm Capital Group has purchased around 12.2% of MicroStrategy’s common shares. The document was filed on June 30 and reveals the purchase of 953,242 shares from the software company.
With $2.3 trillion in assets under management (AUM) and $7.6 billion in annual revenue, Capital Group is one of MicroStrategy’s largest investors. Data from CNN indicates that investment giant BlackRock Fund Advisors ($9 trillion in AUM) is the company’s largest investor.
In total, BlackRock has a 14.56% stake in MicroStrategy which translates into 1,132,982 shares worth over $752 million. The firm has seen a 6% profit on its investment. A small percentage compared to the 1,775% and 663% profit made by the Susquehanna Investment Group and Morgan Stanley, respectively.
How Institutions Could Be Trying To Fool To Accumulate Bitcoin
The impressive profit scored by institutions with MicroStrategy demonstrates that there is a growing demand for BTC-based investment products. The Grayscale Bitcoin Trust (GBTC) was considered the go-to institutional investment, but it has been trading at a discount for several months and has other limitations which MSTR shares lack.
Additional data provided by Ecoinometrics, MSTR shares record a 315% profit since the launch of their Bitcoin treasury program. The company outperforms traditional investment indexes such as NASDAQ and the S&P 500 despite Bitcoin’s price recent pull-back from its all-time high.
Many argue that institutions have turned their backs on the BTC trade, but they could be playing an entirely different game. BlackRock and other investment giants such as Guggenheim executives have changed their statements from BTC as a “hedge against inflation” to “this is not the time to buy Bitcoin”.
Their actions and trades prove the opposite. The interest is real despite what they are telling big mainstream media networks. In a recent interview with CNBC’s Squawk Box, the Chairman and CEO of BlackRock Larry Fink said the following on BTC and cryptocurrencies as investment products:
In my last two weeks of business travel, not one question has been asked about that. That is just not part of the focus of retirement and long-term investors. We see very little in terms of investor demand.
At the time of writing, Bitcoin trades at $31,344 with losses across the board. The first cryptocurrency by market cap has been trending downwards in the past few days and could face more losses as the market approaches the weekend. These days have been majorly bearish in the short term.