Asset manager Vanguard may not be planning to offer Bitcoin exchange-traded funds (ETFs) on its platform, but it still has exposure to the cryptocurrency as it owns and manages a large stake in MicroStrategy (MSTR).
According to data from Yahoo Finance, Vanguard Group held over 1,126 million MSTR stocks as of September 2023, making it the second-largest institutional shareholder in the company, with 8.24% of ownership.
MicroStrategy’s stock is also part of the portfolio of several of Vanguard’s mutual funds, including Vanguard Total Stock Market Index Fund, Vanguard Small-Cap Index Fund, Vanguard Extended Market Index Fund, and Vanguard Small-Cap Growth Index Fund.
MSTR top institutional holders. Source: Yahoo Finance
MicroStrategy’s balance sheet has significant exposure to Bitcoin (BTC). The company and its subsidiaries have accumulated 189,150 BTC over the past years, with a combined purchase price of approximately $5.9 billion. The hype around Bitcoin ETFs skyrocketed the stock's price in 2023, leading some analysts to label MSTR as “essentially a leveraged Bitcoin ETF.”
Vanguard, on the other hand, has tried to distance itself from the crypto market. On Jan. 11, while several asset managers debuted spot Bitcoin ETFs on Wall Street’s major exchanges, Vanguard blocked the purchase of such products, claiming they did “not align” with its vision, and that it's “focused on asset classes such as equities, bonds, and cash, which Vanguard views as the building blocks of a well-balanced, long-term investment portfolio.”
The company’s indirect but significant exposure to Bitcoin means BTC price movements are likely to have an impact on its mutual funds and MSTR shareholdings. However, it’s also a way for clients to gain exposure to cryptocurrency through the investing platform.
Crypto firms are forecasting a surge in Bitcoin-related products over the coming months, such as leveraged and short Bitcoin ETFs and crypto loans collateralized by Bitcoin.
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