MicroStrategy shares were acquired by Canada's 6th largest commercial bank

National Bank of Canada, the country’s sixth-largest commercial bank, has increased its shareholdings in MicroStrategy by 8.8% during the first quarter of 2023, according to a recent 13F-HR form filing. As per the filing, the bank’s MicroStrategy shares rose to 1,768, valued at $516,822 as of March 31, up from 1,625 held as of January 24.

This move by National Bank of Canada comes as several firms and hedge funds are gaining exposure to Bitcoin through MicroStrategy stocks. Financial giants such as Fidelity, BlackRock, and Bank of America have acquired over $75 million in MicroStrategy stocks in the first quarter of 2023.

MicroStrategy, a business intelligence software company, has been acquiring Bitcoin as a treasury reserve asset since August 2020. The company currently holds over 140,000 Bitcoin, making it one of the largest corporate holders of the digital asset.

MicroStrategy’s CEO, Michael Saylor, has been a vocal proponent of Bitcoin and has been actively promoting the digital asset to other corporate leaders. He believes that Bitcoin is the best store of value and has the potential to replace gold as a reserve asset.

As more institutions and corporations adopt Bitcoin, the digital asset is likely to see increased demand, leading to higher prices. This trend could lead to a virtuous cycle, where the adoption of Bitcoin by institutions leads to higher prices, which in turn leads to more adoption.

However, not everyone is convinced by MicroStrategy’s Bitcoin acquisition strategy. One such person is Hal Press from NorthRockLP, a hedge fund manager, tweeted that “The idea of taking a software company and levering it to the gills to run a “Bitcoin acquisition strategy” is so comically stupid it’s actually quite funny.”

One of the main arguments against MicroStrategy’s Bitcoin acquisition strategy is that it deviates from the company’s core business. MicroStrategy’s primary business is providing software solutions to help businesses analyze and manage their data. While the company has a history of making strategic acquisitions to expand its product offerings, its move into Bitcoin seems like a radical departure from its core business.

Critics also argue that MicroStrategy’s Bitcoin investment is too heavily leveraged. The company has borrowed money to finance its Bitcoin purchases, meaning that any drop in the price of Bitcoin could have a significant impact on the company’s finances. Additionally, the volatility of Bitcoin makes it difficult to predict its future value, which could result in massive losses for MicroStrategy if the price of Bitcoin were to drop dramatically.

Despite the criticism, MicroStrategy’s CEO Michael Saylor has defended the company’s Bitcoin acquisition strategy, arguing that Bitcoin is a better long-term store of value than traditional assets like gold. Saylor has also stated that he believes that Bitcoin is a hedge against inflation and that it will eventually replace fiat currencies as the world’s dominant form of money.

In conclusion, the acquisition of MicroStrategy shares by National Bank of Canada is a significant development that highlights the growing institutional adoption of Bitcoin and other cryptocurrencies. As more traditional financial institutions enter the crypto space, the industry is likely to see continued growth and greater mainstream acceptance of digital assets.

Original link: Crypto Nook