Among MicroStrategy’s largest shareholders, Vanguard has indirect exposure to Bitcoin

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 holds more than 1,126 million MSTR shares as of September 2023, making it the second largest institutional shareholder with an 8.24% ownership in the company.

MicroStrategy Stock is part of a portfolio of several Vanguard mutual funds, including the Vanguard Total Stock Market Index Fund, the Vanguard Small-Cap Index Fund, the Vanguard Extended Market Index Fund and the Vanguard Small-Cap Growth Index Fund.

MicroStrategy Balance has a high exposure to Bitcoin (BTC). The company and its affiliates have accumulated 189,150 BTC over the years, with a combined purchase price of $5.9 billion. The hype around Bitcoin ETFs in 2023 has boosted its stock price, leading some analysts to label MSTR “essentially a leveraged Bitcoin ETF.”

Vanguard, meanwhile, has tried to distance itself from the crypto market. In the year On January 11, when several asset managers launched Bitcoin ETFs on Wall Street's major exchanges, Vanguard suspended purchases of such products, saying they were “not aligned” with its vision and “focused on asset classes like equities.” bonds, and cash, which Vanguard sees as the building blocks of a balanced long-term investment portfolio.

The company's indirect but significant exposure to Bitcoin means BTC price movements can affect their mutual funds and MSTR shares. However, it is a way for clients to gain exposure to cryptocurrency through an investment platform.

Crypto companies predict an increase in Bitcoin-related products in the coming months, such as leveraged and short Bitcoin ETFs and Bitcoin-backed crypto loans.

Magazine: How to protect your crypto in a volatile market — Bitcoin OGs and experts weigh in.