The bitcoin space is being infiltrated by institutional players everywhere, the biggest one as of late being MicroStrategy, which has invested in more than $400 million in BTC over the past month.
MicroStrategy Is Pushing the BTC Envelope
MicroStrategy claimed that it was purchasing the BTC as a means of protecting itself against a weakening US dollar. Many now view bitcoin as something that can keep their wealth safe during times of economic strife. What’s interesting, however, is that several institutional platforms have also wound up investing in MicroStrategy, which has indirectly given them access to crypto.
Some of these investors include Black Rock, Norway’s $1 trillion oil fund and Vanguard. These three entities now hold combined asset holdings of approximately $100 million in total. Vetle Lunde, an analyst at the bitcoin and crypto intelligence firm Arcane Research in Oslo (the capital of Norway), explained in a recent interview:
Through its ownership stakes in MicroStrategy (1.51 percent as of December 31, 2019), the Norwegian Government Pension Fund now indirectly holds 577.6 bitcoin.
It was also revealed that Black Rock and Vanguard each hold a little over 15 and 11 percent, respectively, of stock shares in MicroStrategy. Thus, these companies currently hold about 10,000 units of bitcoin when put together.
Lunde was quick to mention, however, that the Norway oil fund isn’t really playing its cards right when it comes to proper investment strategies. He mentioned that the fund does not invest in gold, which he later deemed a heavy mistake on executives’ parts. He states:
We are a long way from the Norwegian Government Pension Fund to take a direct position in bitcoin. The fund is positioned in equities, fixed income and real estate, and for example currently holds no gold. However, the fund is invested in gold mining companies, such as the Newmont Goldcorp Corp, where the fund is holding a 0.95 percent stake.
Lunde believes that several companies are now on the verge of following in MicroStrategy’s footsteps and will invest in bitcoin on their own. Should this occur, he’s confident the Norway oil fund could potentially garner new bitcoin units for itself in the coming weeks or months.
An Odd Time to Invest?
What’s particularly interesting about the bitcoin purchase on MicroStrategy’s part is that it’s choosing to invest in bitcoin at a time when the digital asset is entering bearish territory. The currency recently dropped roughly $2,000 from a $12,400 figure down to $10,400. Micah Erstling – trader at bitcoin and crypto market maker GSR – explained in a discussion:
Institutional curiosity and explorations continue to increase… Crypto has been unable to shake its recent correlation to the S&P. However, bitcoin should see strong support at $10,000. Equities and gold touched two-month lows on Monday, but bitcoin was relatively strong holding well above the $9,900 levels from two weeks ago.