Software company MicroStrategy is receiving attention from major players in the financial world due to its Bitcoin bet. Almost three years ago, this company became one of the first publicly traded entities in the U.S. to integrate BTC into its financial strategy. Since then, it has kept on adding BTC to its treasury.
Looking For A Way To Get Exposure To Bitcoin
Data from Bitcoin Treasuries indicates that MicroStrategy holds the largest BTC supply for any publicly traded company with $3,9 billion or 140,000 BTC. This represents 0.66% of the entire Bitcoin supply.
As a result, buying MicroStrategy shares is a proxy used by companies in the U.S. to gain exposure to Bitcoin. In this country, large entities have limited options to bet on BTC’s long-term appreciation.
The U.S. Securities and Exchange Commission (SEC) has refused to approve a spot Bitcoin Exchange Traded Fund (ETF), forcing companies to gain indirect exposure. As shown in the chart below, several companies are using this strategy.
These companies include financial institution Bank of America, which bought over 226,506 MicroStrategy shares, and fund and asset managers BlackRock and Fidelity, which bought 10,800 and 96,800 shares, respectively, in Q1, 2023 alone.
Capital Research and The Vanguard Group are two of MicroStrategy’s largest shares holders and are still bullish on the company, with 154,100 and 28,000 shares purchased over the same period. The capital injection received by MicroStrategy has impacted its price.
The company is tied to the price of Bitcoin. Thus, it has seen a downtrend over the past year but continues to trend well above its 2020 low of around $110 following its Bitcoin treasury strategy. The correlation is poised to benefit the software company and its investors if BTC can keep climbing from its yearly lows.
In 2020, MicroStrategy started a trend that has strengthened even as BTC’s price trends to the downside. The number of companies holding the cryptocurrency as part of their treasury has increased exponentially since 2018.
Now, for the first time in months, the company has announced new BTC purchases and a new edition of its Bitcoin and Lightning for Corporations events. It remains to be seen if the event can push more companies into adopting the cryptocurrency.