Bank of America and Fidelity Bank Hold Large Amounts of MicroStrategy Stocks in Q1

04/11/2023 06:32 • Metaverse & Beyond • 73 views

On April 11th, it was reported that Bank of America and Fidelity Bank held a large amount of MicroStrategy stocks on their balance sheets in the first quarter, indicating that institutions are still interested in indirect Bitcoin exposure.

Foreign media: Bank of America and Fidelity have indirect risk exposure through increasing their holdings of MicroStrategy shares compared with Tekin

Bank of America and Fidelity Bank’s recent holdings of MicroStrategy stocks reflect a continuing trend for institutions seeking exposure to Bitcoin through indirect means. This article discusses Bank of America and Fidelity Bank’s investment in MicroStrategy stocks and the reasons behind it.

The Trend of Institutional Investment in Cryptocurrency

Cryptocurrency investment has been gathering momentum among institutional investors. In December 2020, MassMutual, an insurance company, invested $100 million in Bitcoin. In February 2021, Tesla added $1.5 billion worth of Bitcoin to its balance sheet, and in March 2021, Morgan Stanley announced the start of cryptocurrency investment for their wealthy clients.

Bank of America’s Investment in MicroStrategy Stocks

Bank of America disclosed its holdings of MicroStrategy stocks in its filing with the Securities and Exchange Commission. Bank of America’s investment in MicroStrategy stocks was valued at $475,000 in the first quarter of 2021. This investment was significant as it indicated Bank of America’s interest in indirect exposure to Bitcoin through MicroStrategy stocks.

Fidelity Bank’s Investment in MicroStrategy Stocks

Fidelity Bank’s holdings of MicroStrategy stocks were also revealed in its filing with the Securities and Exchange Commission. Fidelity Bank’s investment in MicroStrategy stocks was valued at $17 million in the first quarter of 2021. Fidelity Bank has been investing in cryptocurrency through its subsidiary, Fidelity Digital Assets.

Reasons for Investing in MicroStrategy Stocks

Investment in MicroStrategy stocks allows institutions to indirectly gain exposure to Bitcoin. MicroStrategy invested $2.2 billion in Bitcoin in 2020 and added more Bitcoin to its balance sheet in 2021. The MicroStrategy stock price is thus expected to be positively affected by the price movement of Bitcoin. Institutions are thus interested in this indirect exposure to Bitcoin without actually buying Bitcoin themselves.

Conclusion

Bank of America and Fidelity Bank’s investment in MicroStrategy stocks indicates that institutional investors are still keen on investing indirectly in Bitcoin. Investment in MicroStrategy stocks allows for exposure to Bitcoin’s price movement without directly owning Bitcoin. This trend of indirect Bitcoin exposure is expected to continue among institutions.

FAQs

#1. Is it important for institutions to invest in Bitcoin?

Institutions may invest in Bitcoin for diversification purposes and/or to potentially gain from price appreciation.

#2. How does investment in MicroStrategy stocks allow for indirect exposure to Bitcoin?

MicroStrategy has a significant amount of Bitcoin on its balance sheet. Investment in MicroStrategy stocks is expected to positively correlate with the price of Bitcoin.

#3. Will investment in MicroStrategy continue to rise?

As long as institutional investors show an interest in Bitcoin exposure, investment in MicroStrategy stocks is expected to continue. However, the performance of Bitcoin and MicroStrategy should still be evaluated on a regular basis.

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