Vanguard Gains Major Stake in World's Largest Bitcoin-Holding Corporation
In an unexpected turn of events, one of the world's most conservative asset managers, Vanguard, has found itself at the helm of a significant Bitcoin investment, not by design, but as a result of its passive indexing strategy.
Vanguard, through its investment in MicroStrategy—a company that holds the largest corporate Bitcoin treasury—has become the largest individual shareholder. With over 20 million shares, or about 8% of MicroStrategy’s Class A stock, Vanguard's stake is a reflection of the company’s business due to MicroStrategy's inclusion in major indexes like the Nasdaq 100 and mid-cap benchmarks that Vanguard tracks with its index funds [1][3][5].
Despite historically being critical of Bitcoin—labeling it speculative, refusing to offer Bitcoin ETFs, and explicitly stating the firm does not invest in such “speculative assets”—Vanguard’s passive funds buy shares of all companies in the indexes they follow, regardless of business activity. Since MicroStrategy aggressively buys Bitcoin (about 600,000+ Bitcoins worth tens of billions), Vanguard ended up indirectly owning significant Bitcoin exposure through MicroStrategy shares without changing its stance on cryptocurrencies [1][3][5].
Analysts predict that Vanguard may reconsider its stance on Bitcoin if its price reaches $150,000 or more, and the market continues to mature. There are no official signs that Vanguard plans to offer crypto ETFs, but market pressure and client demand could force a review of its current policies [2].
The story of Vanguard and MicroStrategy illustrates how Bitcoin can integrate into the traditional financial system without explicit intention. This Bitcoin price surge has sparked increased institutional interest in related companies, and even skeptics like Vanguard end up participating in the Bitcoin market due to their investment in indexed funds [4].
Vanguard's exposure to MicroStrategy is distributed among several funds, including Vanguard Total Stock Market Index Fund (VITSX), Vanguard Extended Market Index Fund (VIEIX), and Vanguard Growth ETF (VUG) [6]. The integration of Bitcoin into conventional financial structures is occurring not just by choice, but by design, due to index-based investing.
Strategies' Bitcoin holdings are valued at over $70 billion, and its focus on Bitcoin accumulation has led to a growth of approximately 3,700% in the value of its shares (MSTR) over five years [7]. Michael Saylor, CEO of Strategy, views Vanguard's participation as a "powerful signal of growing institutional support for Bitcoin" [8].
[1] - Nasdaq 100 [2] - Bloomberg [3] - Vanguard Total Stock Market Index Fund (VTSMX) [4] - CoinDesk [5] - Vanguard Extended Market Index Fund (VEIPX) [6] - Vanguard Growth ETF (VUG) [7] - MicroStrategy's Financial Reports [8] - Twitter
Vanguard's significant Bitcoin exposure originates from its investment in MicroStrategy, a company that holds the largest corporate Bitcoin treasury, due to MicroStrategy's inclusion in indexes like the Nasdaq 100 and mid-cap benchmarks that Vanguard tracks with its index funds. Despite Vanguard's historically critical stance on Bitcoin, its passive funds buy shares of all companies in the indexes they follow, resulting in Vanguard owning Bitcoin indirectly, without explicitly investing in cryptocurrencies.
