- Major financial firms, including BlackRock and Fidelity, are bolstering their Bitcoin (BTC) exposure amid the crypto’s price plunge.
- Despite the majority of institutional investments being underwater, BlackRock, Fidelity, and others are significantly escalating their indirect BTC investments via MicroStrategy (MSTR) stocks.
In a seemingly counterintuitive response to the recent turmoil in the Bitcoin market, financial powerhouses such as BlackRock and Fidelity are noticeably increasing their BTC exposure. As fear of escalating regulatory scrutiny from the U.S. SEC grips the market, these “heavy hitters” are seizing the opportunity to expand their BTC holdings. Even organizations without direct Bitcoin investments have shown considerable bullishness in recent months.
When it comes to blue-chip banks and corporations, many are escalating their Bitcoin bets via proxy – the shares of MicroStrategy (MSTR). By injecting substantial liquidity into MSTR – the largest corporate holder of Bitcoin – these firms indirectly gain exposure to the volatile performance of the leading cryptocurrency. The Bitcoin Culture newsletter reveals this strategy as a popular approach for entities either uninterested in or limited from direct BTC purchases.
Both BlackRock and Fidelity stand amongst the top five owners of MSTR stocks, highlighting their interest in the Bitcoin market. Fidelity has reportedly augmented its MSTR exposure by more than sevenfold in recent months, as mentioned by CNN. Likewise, Bank of America significantly raised its MSTR stake through BofA Securities Inc., witnessing an impressive surge of over 47,000%, according to Bitcoin Culture.
Despite the unwavering optimism from these financial giants, most institutional investments are currently “underwater” or experiencing losses due to the current Bitcoin prices. However, it hasn’t deterred institutions from building their BTC reserves, with large Canadian banks and global investment platforms also amassing MSTR stocks.
Bitcoin Treasuries, a credible tracker of BTC holdings of publicly traded companies, governments, and investing conglomerates, reveals that institutions currently account for 1,652,703 Bitcoins, or 7.87% of its net supply. Yet, most of these holdings are not profitable at the moment. Among the top ten corporate Bitcoin holders, only Bitcoin Group SE, Bigg Digital Assets, and Advanced Bitcoin Technologies AG are reaping benefits from their BTC investments.