- Digital assets are getting more and more enticing as firms scramble to get hold of them for their clients.
- Capital International Group, an asset management firm, has acquired a significant portion of MicroStrategy.
- Capital International Group showed its intent to move into digital assets and went in on the world’s largest bitcoin holder.
- Experts have lauded the move as a positive development for both MicroStrategy and Capital International Group.
The ever-growing popularity of digital assets has brought many initially skeptical investors to the table. Institutional investors were previously trepidatious at the prospect of getting involved in cryptocurrencies due to the high volatility, and concerns around regulation.
The tide has seemingly changed with many now willing to go all in. Capital International Group, a leading asset management firm, has acquired a portion of MicroStrategy in what many consider to be a shocking, but highly beneficial maneuver.
The move holds big implications for all parties involved, but especially the market as hopes to recover and end the year high remain. Huge investment banks like J.P. Morgan and Morgan Stanley have started investing in digital assets.
The Big Move
Capital International Group acquired a whopping 12% interest in MicroStrategy and became the second-largest shareholder in the company, behind Blackrock.
Capital International Group now holds a $560 million stake in MicroStrategy Web, while Blackrock has a $700 million holding.
The investment management giant, which has over $2 trillion in assets and was looking to follow the example of its counterparts by expanding into digital assets, chose MicroStrategy, which is hardly surprising considering the large crypto holdings of the company and its CEO, Michael Saylor, who is at the forefront of Bitcoin positivity.
The Los Angeles-based asset management company provides services to a range of clients including pension trustees and wealth managers.
What’s in It for the Parties?
Capital International Group was yet to delve into cryptocurrencies like many of its peers have, so this represents a strategic move for further growth. MicroStrategy is the leading holder of bitcoin with over 105,000 bitcoins and has shown no signs of slowing down.
Capital International stands to gain a lot from this move. MicroStrategy, on the other hand, recently bought an additional 13,005 bitcoins for a whopping $489 million, a move which was criticized by many and affected MicroStrategy’s stock value due to the crypto market’s crashing prices at the time.
This new buy-in from Capital has renewed confidence among investors that the move may be heading in the right direction and that the future indeed lies with crypto.
On The Flipside
- Michael Saylor may be wrong about a possible Bitcoin rebound in the short run.
- The continuing issue around mining in China will hinder the impact that this move would have otherwise had on the market.
Michael Saylor’s Views
Michael Saylor was the first CEO to store part of his company’s reserves in Bitcoin. Cryptocurrencies have fast become a second business for MicroStrategy, which holds over 105,000 bitcoins.
Michael Saylor himself has repeatedly stated that cryptocurrencies are the ultimate investment that everyone must get into. Under Saylor’s direction, Bitcoin has become MicroStrategy’s primary treasury reserve asset, which means that the cryptocurrency is now used in day-to-day financial management. Having praised Bitcoin many times over, Saylor had more to say.
"Satoshi started a fire in cyberspace. While the fearful run from it and fools dance around it, the faithful feed the flame, and dream of a world bathed in the warm glow of cyberlight"