Investment banker Ellie Frost sent out a Twitter thread revealing that four of Microstrategy's top 10 owners had already been enthusiastic on bitcoin until Michael Saylor's major plunge into the digital currency.
According to Frost, Microstrategy did not have much convincing to do, as top shareholders Blackrock, Russell Investments, Renaissance Tech, and Citron Fund already had documented interest in bitcoin (BTC).
Saylor has stated that it only took six months to get investors’ approval for moving $250 million into BTC – a process Frost argues should take about a year, at the minimum. In her final analysis, the tech investment banker observed:
They were already open to it. The fast timeline implies others were also curious. They don’t want to miss the boat and the fact that [bitcoin] has survived 12yrs shows it’s ‘not just a fad’.
The situation of the 8th largest Microstrategy shareholder, Russell Investment, who raised their impact in the business by more than 70%, illustrates why it was not challenging to get shareholders on board.
"Since 2018, they've blogged on BTC with quotes like, 'While many are questioning Bitcoin's foundations, perhaps even more importantly, Bitcoin is questioning the foundations of the central banks,'" Frost stated.
Tenth-placed Renaissance Tech has raised their shareholding by four times since June in the same timeframe that they earned internal clearance for bitcoin futures trading.
The time coincided with the public announcement by Microstrategy that it was exploring alternate treasury reserve funds. Renaissance Tech has issued its consent, recognizing that bitcoin is on the table.
The Citron Fund has moved from being publicly Bearish on Bitcoin for three years to naming Microstrategy "the best BTC exposure available on the stock market today."
"Citron picked up stock of MSTR (Microstrategy) and published their investment thesis priced at $700/share. It is ~145 percent higher than the current $286 price," Frost said.
Blackrock's shareholdings declined by 5 per cent, but the firm remains the biggest cumulative holder with 15 per cent of the total outstanding stock.
"They are now the biggest wealth manager in the country, handling $8 trillion. Their chief investment officer said two weeks ago, 'BTC is here to remain.' Their CEO went on to suggest that BTC might substitute gold," Frost tweeted.
Frost often pointed to the shortage of other alternatives as a third cause. "Most venture funds have charters that do not encourage to invest in crypto.
For some, they have pointed to custody/security issues. Basically, any fund will invest in securities, however you pay a premium to W/GBTC. MSTR is the strongest of all worlds."
According to Frost, if Saylor's approach is effective, top investors might use it to lobby for BTC in their other portfolio companies.
Microstrategy has purchased up to $475 million worth of bitcoin, or BTC 40,824, since August – the biggest holding firm of any publicly listed company.
The company expects to invest an extra $635 million on Bitcoin.
