Not content with touting the tokenization of gold and other real-world assets as a major driver of digital asset adoption earlier this month, it seems Bank of America is bullish on Bitcoin too. According to a report from The Daily Hodl, the North Carolina-based multinational has spent the first quarter of 2023 steadily increasing its stake in MicroStrategy, hence indirectly investing in the granddaddy of all crypto.
MicroStrategy is famously the largest institutional holder of bitcoin, ever since co-founder Michael Saylor first discovered the original digital currency in 2020 and became an overnight evangelist. The company currently holds 140,000 BTC, valued at over $4 billion. As such its stock price tends to correlate strongly with BTC price, making it a fairly decent proxy for direct bitcoin investment in the crypto-reticent waters of the United States.
At the start of Q1, Bank of America held just 474 shares in MicroStrategy, according to CNN Business. However, by the end of the quarter it had amassed a whopping 226,980 shares, an increase of over 47,500%. This gives it a 2.37% stake in the company, making it the fourth largest stockholder.
And Bank of America wasn’t alone in its heavy accumulation of MicroStrategy stock. Boston-based Fidelity increased its stake in the software licensing company (or bitcoin-ETF-equivalent for US institutions if you prefer?) by nearly 29,000%, adding 96,800 shares to the 334 it owned prior to the start of Q1. This made it the 9th biggest MicroStrategy stakeholder, owning a 1.01% share of the company.
If anything, it would seem that buying into MicroStrategy stock has been an even better investment than a direct investment in bitcoin itself so far this year, with the share price seeing gains of around 140% year-to-date, compared to around a 90% price increase for BTC. However, according to CoinTelegraph analyst Yashu Gola, the firm’s core business is not particularly healthy, and there is a high probability of a 20% correction in Q2.
Whether Bank of America, Fidelity, et al have the same concerns and reduce their stockholdings as quickly as they were amassed remains to be seen. But it’s certainly nice to see that not all US financial institutions are aggressively anti-crypto and digital assets. Is there still hope for US crypto companies? We will continue to Observe and report back.