Big money manager Vanguard Group may have shunned spot Bitcoin exchange-traded funds (ETFs), but it is quietly making a big bet on the cryptocurrency through its investment in MicroStrategy, the enterprise software company that has amassed a large Bitcoin holding.
This paradoxical stance highlights the growing debate over Vanguard’s view of Bitcoin as an investment asset. Vanguard’s decision to invest in MicroStrategy signals that it is taking Bitcoin seriously, but its cautious approach to ETFs suggests that it is still grappling with the cryptocurrency’s risks.
Bill Miller IV, Chief Investment Officer of Miller Value Partners, underscored the significance of these ETFs. He said they are a major stride for institutional capital entering the cryptocurrency domain.
While acknowledging their importance, he presented an alternative investment that he believes outshines the benefits of a spot Bitcoin ETF – MicroStrategy (MSTR).
According to Miller, MicroStrategy offers distinct advantages over a spot Bitcoin ETF. Notably, it boasts higher liquidity and, as the world’s largest Bitcoin owner, avoids associated fees. Miller emphasized the value of being the foremost holder of a new technological asset, citing long-term potential.
Additionally, he said MicroStrategy’s CEO is a further appeal. Sailor is a substantial shareholder with significant personal Bitcoin holdings and a robust technological background,.
Discussing MicroStrategy’s unique business model, Miller noted its flexibility to adjust its value by selling shares to purchase Bitcoin. It also buys back shares based on market conditions. This adaptable approach, he argued, benefits ongoing shareholders and contributes long-term value.