Capital Group, one of the largest investment firms in the world, has altered its strategy by significantly increasing its investments in Bitcoin and related companies.
Changes in Investment Strategy
Capital Group, founded in 1931, is known for its conservative approach to investments. However, it has recently made a sharp pivot by increasing its stake in Bitcoin-related companies. Veteran portfolio manager Mark Casey believes that Bitcoin is a commodity similar to gold or oil and called it 'one of the coolest things that has ever been created by people.' This shift comes in the wake of the U.S. SEC's approval of Bitcoin spot ETFs in January 2024.
Key Holdings in the Bitcoin Sector
The firm's most significant stake is in Strategy, formerly MicroStrategy, which has become a vehicle for Bitcoin investment. Capital Group acquired a 12.3% stake in Strategy in 2021, initially valued at over $500 million. This holding has now grown to approximately $6.2 billion after a more than 2,200% increase in Strategy's stock over five years. Additionally, Capital Group has also invested in other firms that buy and hold Bitcoin, including Metaplanet and Mara Holdings.
Market Perspectives and Trends
As of now, corporate treasuries hold over 1 million BTC, valued at more than $117 billion. Should companies like Metaplanet and XXI achieve their Bitcoin accumulation targets, they may rank among the top five corporate Bitcoin holders globally. The success of Capital Group in this domain could signal Bitcoin's growing acceptance in traditional investment portfolios.
The changes in Capital Group's strategy highlight the increasing interest in Bitcoin and related sectors by traditional investment firms, which could reshape the market as a whole.
