Why Capital International’s $ 600 million investment in MicroStrategy matters to Bitcoin

Capital International’s strategic investment in one of the most talked-about companies of the year should not raise any eyebrows. However, when this company pursues an unprecedented strategy with a highly experimental digital asset, the world will watch. It’s safe to say that Capital International believes in MicroStrategy as a company and in its CEO Michael Saylor. However, it is also evident that they are buying exposure to Bitcoin.

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Let’s quote Cointelegraph for an overview:

In MicroStrategy’s filings with the SEC for the second quarter of 2021, the company has disclosed Capital International Investors has acquired 953,242 of its own shares. Following the filing of the SEC filing, MicroStrategy’s share price rose more than 1.5% to $ 628.44 at the time of publication

This initial excitement didn’t last. Three days later, the stock trades at $ 589.52. And Bitcoin didn’t even react. “Despite news of a large investment in a company with massive crypto holdings, the price of BTC was seemingly unaffected. Bitcoin is up 2% in the past 24 hours to $ 33,438. “Capital International, however, should remain unimpressed. The daily movements are practically irrelevant when investing in the future.

NewsBTC hands over the microphone to James Wo, CEO of the Digital Finance Group:

I believe that funds with a long investment horizon are de facto betting on Bitcoin’s long-term growth. Many of them are either already exposed to Bitcoin or are about to enter the market in one way or another.

MSTR price chart on Nasdaq | Source: TradingView.com

Why invest in MicroStrategy and not just buy Bitcoin

Michael Saylor actually answered this question himself while explaining it his company’s Bitcoin strategy:

According to Saylor, his company offers two advantages. First, Microstrategy has the ability to pour its software cash flow into Bitcoin. Second, they have the option of borrowing. You can borrow a billion dollars with no interest. Your ETF cannot do that.

And yes, he compared MicroStrategy stocks to an ETF because that’s his competition, not Bitcoin. Some investors want to offer Bitcoin through a regulated market. And despite the high demand and occupations by several top-class financial institutions, the US SEC has not approved a bitcoin ETF.

Therefore, MicroStrategy is Capital International’s best option right now. Plus, they might be fans of Michael Saylor’s no-compromise approach to Bitcoin accumulation.

Why Capital International’s investments are important to Bitcoin

There is institutional interest. And every day there are more opportunities for that money to reach its goal. Not everyone will do anything to get more Bitcoin like MicroStrategy. Not all companies can start developing bitcoin tools and services like Square. Not everyone will develop ramps to accept Bitcoin for their product and then suspend the program for the wrong reasons like Tesla.

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Different options for different people. However, there are risks associated with it. NewsBTC quotes Ben Hunt. by Second Foundation Partners:

He describes the strategy as a way to ingest bitcoin and swallow what they did with every other financial innovation. It is preferable to stifle its censorship resistance and turn it into another Wall Street gaming table. The result is a future where people will be encouraged to buy bitcoin.

“Because the Bitcoin artistic identity and value that I admire has been undermined by Wall Street’s castration machine and the US Treasury Department’s regulatory panopticon.

Has that already happened? Or can an open network like Bitcoin overcome this hurdle with ease? Members of the community say that “Bitcoin doesn’t care about everyday actions”. Either way, there is interest in institutional investing and the chips will drop where they can. To wrap up this, James Wo goes on with the idea that funds “bet on the long-term growth of Bitcoin“:

Some of this upward momentum is already priced into our current price. However, scarcity is a major factor that won’t really have an impact in the long run.

The game is just beginning, but the cards are already on the table. In the long term, it looks good for Capital International and Bitcoin. In addition, the decentralized network has scarcity as an ace up its sleeve.

Featured image by Mathieu Stern on Unsplash – Charts from TradingView

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