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Major Wall Street companies are accumulating MicroStrategy shares as a way to gain leveraged exposure to Bitcoin (BTC).
At the time of writing, MicroStrategy holds 331,200 BTC worth $30.34 billion and devolves almost all the capital it can get to buy more. This also follows the firm recently acquiring an additional 51,780 BTC for about $4.6 billion at an average price of $88,627 per Bitcoin, the largest transaction by the company so far.
MicroStrategy is a publicly-traded business intelligence company founded back in 1989 that pivoted to acquiring as much Bitcoin as possible in 2020. The company now holds over 1% of all Bitcoin that will ever exist, with institutional interest in MicroStrategy being an interest towards a regulatory-friendly Bitcoin investment.
The details
According to a recent report by industry news outlet The Block, Benchmark analyst Mark Palmer wrote that MicroStrategy allows for easy leveraged positions on Bitcoin. He explained in a Nov. 18 note to clients:
“MSTR’s ability to generate compounding yield on its bitcoin holdings, enabled by leverage accrued through the repeated tapping of the U.S. capital markets, differentiates its stock from alternative means of gaining exposure to bitcoin such as spot bitcoin ETFs.”
PortfoliosLab data shows that since Sept. 1, Bitcoin’s dollar price has increased by nearly 57%, while MicroStrategy Shares have increased by over 157%. MicroStrategy’s performance significantly overtook the performance of the asset, which it is accumulating.
The strategy has been shown to be successful enough that it now has some imitators. One example is Metaplanet — ofter referred to as Japan’s MicroStrategy — which just recently issued 1.75 billion yen ($11.3 million) of one-year ordinary bonds to buy more Bitcoin.
Market data shows that nearly 56% of MicroStrategy shares are institutionally owned. Institutional MicroStrategy holders reportedly reached 721 — for a total of 102.4 million shares. The world’s second-largest asset manager Vanguard Group bought over 17.45 million MicroStrategy shares in Q3 worth $6.71 billion.
The top holder is Capital International Investors, with its nearly 17.53 million shares worth $6.74 billion. Major Wall Street names such as Morgan Stanley ($3.7 billion), BlackRock ($3.65 billion) and BlackRock Finance ($3.4 billion) are also major MicroStrategy holders.
that the number of MicroStrategy shares owned by institutions more than doubled in November. The data is based on data publicly filed with the United States Securities and Exchange Commission (SEC) through required disclosures.
