Capital International’s strategic investment in one of the most discussed companies of the year should not raise eyebrows. However, when this company pursues an unprecedented strategy using a highly experimental digital asset, the world is watching. It’s safe to say that Capital International believes in MicroStrategy as a business and its CEO Michael Saylor. However, it is also evident that they are buying Bitcoin exposure.
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Let’s quote Cointelegraph for an overview:
In documents filed by MicroStrategy with the United States Securities and Exchange Commission, or SEC, for the second quarter of 2021, the company disclosed Capital International Investors bought 953,242 shares. Following the release of the SEC filing, MicroStrategy’s share price rose more than 1.5% to $ 628.44 at the time of publication.
This initial excitement did not last. Three days later, the stock is trading at $ 589.52. And Bitcoin didn’t even react, “Despite the announcement of a major investment in a company with huge crypto holdings, the price of BTC has apparently not been affected. Bitcoin has risen 2% in the last 24 hours to reach $ 33,438. “However, Capital International should be unfazed. Daily movements are hardly relevant when investing in the future.
NewsBTC hands the microphone to James Wo, CEO of the Digital Finance Group:
I think funds with a long investment horizon are de facto betting on Bitcoin’s growth over the long term. Many of them are either already exposed to bitcoin or about to enter the market in some way.
MSTR price chart on Nasdaq | Source: TradingView.com
Why invest in MicroStrategy and not just buy Bitcoin
In fact, Michael Saylor himself answered this question by explaining his company’s Bitcoin strategy:
According to Saylor, his business offers two advantages. First, Microstrategy has the ability to sweep its software cash flow into Bitcoin. Second, they have the ability to raise debt financing. They can borrow a billion dollars with zero percent interest. Your ETF will not be able to do this.
And yes, he compared MicroStrategy stocks to an ETF because it’s its competition, not Bitcoin. Some investors want to gain exposure to Bitcoin through a regulated market. And, despite strong demand and fillings by several leading financial institutions, the US SEC did not approve a Bitcoin ETF.
MicroStrategy is therefore Capital International’s best option at the moment. Additionally, they might be fans of Michael Saylor’s shameless approach to Bitcoin accumulation.
Why Capital International’s investment is important to Bitcoin
The institutional interest is there. And every day there are more options for that money to reach its destination. Not everyone will go out of their way to acquire more Bitcoin like MicroStrategy. Not all companies are able to 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 bogus reasons like Tesla.
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Different options for different people. However, there are risks involved. BTC News quotes Ben Hunt of Second Foundation Partners:
He describes the strategy as a way to welcome and swallow Bitcoin, which they have done with all of the other financial innovations. Let’s add that it’s better to quell its resistance to censorship and make it another Wall Street game table. The result is a future where people are encouraged to buy Bitcoin.
“Because the Bitcoin artistic identity that I admire and appreciate has been subverted by the Wall Street sterilization machine and the regulatory panopticon of the US Treasury Department.
Has this ever happened? Or can an open network like Bitcoin overcome this obstacle easily? Community members say “Bitcoin doesn’t care” about mundane stocks. In any case, the interest of institutional investments is there, and the tokens will fall where they can. To close this, James Wo continues with the idea that the funds are “bet on the long-term growth of Bitcoin“:
Some of that bullish momentum has already been factored into the price we currently have. However, scarcity is an essential factor, the real impact of which remains to be shown in the long term.
The game has only just begun, but the cards are already on the table. Things are looking good for Capital International and Bitcoin in the long run. Plus, the decentralized network has scarcity like an ace up its sleeve.
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