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Morgan Stanley bet it all on MicroStrategy

Photo of: Nathan VDH
by Nathan VDH
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Morgan Stanley, the 5th largest bank in the United States, has decided to triple its equity stake in MicroStrategy.

On December 31, Morgan Stanley filed a form with the U.S. Treasury Department to report the transaction. The investment bank acquired 792,627 shares of MicroStrategy stock for a total equity stake of 10.9%.

MicroStrategy is a NASDAQ-listed U.S. company known to have converted some of its cash into bitcoin. The company purchased 21,454 BTC in August, 16,796 BTC in September, and 32,220 BTC in December.

As a result, MicroStrategy holds a total of 70,470 BTCs for a value of $2.8 billion at the current exchange rate. The company had communicated :

“This investment reflects our belief that Bitcoin is a reliable store of value and an attractive asset with significant long-term upside potential over holding cash. »

In recent months, MicroStrategy CEO Michael Saylor has even made a number of statements in support of Bitcoin in the media and on Twitter. A commitment that doesn’t seem to bother the American bank.

MicroStrategy’s share price has had an impressive last month as the company’s stock price increased from $289 to $545 over the period from December 8, 2020 to January 8, 2021.

In fact, the share price has climbed 330% since the company purchased its first Bitcoins on August 11, 2020, from $123 to $545.

Since MicroStrategy’s shares largely track the price of BTC, it is likely that Morgan Stanley is seeking exposure to Bitcoin without directly owning it.

Another U.S. bank did not have the same analysis. In December, Citbank downgraded the rating of MircroStrategy’s stock from “neutral” to “seller” because of its “disproportionate” exposure to BTC.