BlackRock, Vanguard, Indirectly Hold Bitcoin Via MicroStrategy Investment

Earlier this week Bitcoin (BTC) bulls and crypto investors were thrilled by the news that MicroStrategy, a Nasdaq-listed business intelligence company worth $1.2 billion, had formally adopted Bitcoin as its primary reserve asset by purchasing 21,454 BTC ($250 million). 

This led the majority of top crypto analysts and industry folk to post uber-bullish statements on Twitter and for many this confirmed their belief that Bitcoin is in the early stages of a bull market. 

While this news is exciting and a strong sign that institutional adoption of cryptocurrency continues to occur, there is even better news. BlackRock, the $89 billion investment giant, is the biggest shareholder of MicroStrategy. 

According to data from CNN Business, BlackRock Fund Advisors hold a 15.24% stake in MicroStrategy. This means MicroStrategy’s recent purchase gives BlackRock indirect exposure to Bitcoin, the company has essentially turned itself into a “publicly-traded Bitcoin play.”

MicroStrategy has BlackRock as its biggest stakeholder. Source: CNN Business

MicroStrategy predicts a weakening dollar 

In an official statement, MicroStrategy said it was adopting Bitcoin as a “primary treasury reserve asset.” and CEO Michael J. Saylor acknowledged  that Bitcoin could potentially be superior to cash. 

Saylor said:

“Since its inception over a decade ago, Bitcoin has emerged as a significant addition to the global financial system, with characteristics that are useful to both individuals and institutions. MicroStrategy has recognized Bitcoin as a legitimate investment asset that can be superior to cash and accordingly has made Bitcoin the principal holding in its treasury reserve strategy.”

The purchase becomes even more interesting when considering the previous comments both Saylor and BlackRock strategists made about Bitcoin.

In February 2018 conversation with CNBC, BlackRock’s global chief investment strategist Richard Turnill said:

"We see cryptocurrencies potentially becoming more widely used in the future as the markets mature. Yet for now, we believe they should only be considered by those who can stomach potentially complete losses.”

At the time, Turnill laid out some factors that could help buoy Bitcoin in the long-term. He also emphasized that a global regulatory framework on cryptocurrencies could potentially aid the growth of crypto assets.

Since then, the Financial Action Task Force (FATF) under the G7 established a unified cryptocurrency regulatory framework. Most major countries across Asia, Europe, and the U.S. also adopted clearer policies regarding cryptocurrencies.

Saylor, who this week expressed his optimism about the long-term trajectory of Bitcoin had an even more critical perspective in 2013 when he said:

“Bitcoin’s days are numbered.  It seems like just a matter of time before it suffers the same fate as online gambling.”

Bitcoin perceptions are changing

Companies that previously rejected Bitcoin are now beginning to warm up to cryptocurrencies. For example, JPMorgan reportedly accepted Bitcoin exchanges Coinbase and Gemini as clients in May.

Changpeng Zhao, the CEO of Binance, said:

“Smart publicly listed company buys $250,000,000 worth of bitcoin, as a safe haven asset. Stimulus money flowing from Wall Street into bitcoin. Are you in front or behind them?”

This shifting trend in the cryptocurrency industry highlights the increasing maturity of Bitcoin and its growth as a store of value.