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Last Updated: January 13, 2024 00:00 EST | read 2 minutes
Vanguard, one of the world’s leading asset management firms, has acquired a substantial stake in MicroStrategy (MSTR), which offers investors indirect exposure to Bitcoin (BTC).
While Vanguard has opted to launch a Bitcoin exchange-traded fund (ETF) on its platform, its move into MicroStrategy stock positions it as a significant player in the crypto space.
According to Yahoo Finance data, as of September 2023, Vanguard Group owned an impressive 1,126 million shares of MicroStrategy, equivalent to an ownership stake of 8.24%.
The huge investment makes Vanguard the second largest institutional shareholder in the business intelligence firm.
However, what makes this investment particularly interesting is the fact that MicroStrategy has strategically diversified its balance sheet in recent years by accumulating an astonishing 189,150 BTC, valued at approximately $5.9 billion .
As a result, some analysts have labeled MicroStrategy as “essentially a leveraged Bitcoin ETF”.
Vanguard restricts clients from accessing spot Bitcoin ETFs
Unlike many other asset managers that offer spot Bitcoin ETFs, Vanguard has deliberately distanced itself from the crypto market.
On January 11, as a wave of asset managers launched spot Bitcoin ETFs on major Wall Street exchanges, Vanguard opted to halt purchases of such products.
The company justified its decision by saying that these products are not in line with its approach, as it focuses on traditional asset classes such as equities, bonds and cash, which it sees as the building blocks of a well-balanced, long-term investment. I see. Portfolio.
However, despite its official stance on Bitcoin ETFs, Vanguard’s substantial stake in MicroStrategy signals its underlying indirect exposure to the cryptocurrency market.
Indirect exposure means that 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, are potentially exposed to Bitcoin’s volatile price movements. Are affected by. ,
Unlike Vanguard, Zurich-based banking giant UBS has said it will let some clients who want to trade Bitcoin ETFs do so subject to certain conditions.
According to the person close to UBS on condition of anonymity, the conditions include: UBS cannot solicit trades and accounts with low risk tolerance will not be able to buy them.
Citigroup, meanwhile, “currently offers our institutional clients access to the recently approved Bitcoin ETF from an execution and asset servicing perspective,” a spokesperson said.
The New York-based global bank is “evaluating products for personal wealth clients.”
In a historic move, the SEC approved 11 spot bitcoin ETFs, a significant departure from more than a decade of regulatory opposition.
This decision has opened the door for major traditional financial giants like BlackRock, Invesco and Fidelity to provide direct access to funds investing in Bitcoin.
The spot Bitcoin ETF saw a remarkable $4 billion in trading volume on its first trading day, according to Yahoo Finance data.