Capital Group Becomes a Major Backer of Bitcoin
Capital Group is one of the oldest and most careful investment firms in the world. Recently, it has become one of the biggest mainstream supporters of bitcoin. What started as a $1 billion investment in companies that hold bitcoin has now grown to over $6 billion. This is a big moment for Wall Street’s connection to bitcoin, a rare digital asset.
Mark Casey’s View on Bitcoin
Mark Casey is an equity portfolio manager at Capital Group’s San Francisco office. He has worked at the firm for more than 20 years. Casey is a value investor, following the style of famous investors like Warren Buffett and Benjamin Graham. Many people were surprised when he became one of the strongest bitcoin supporters among traditional finance leaders.
On a podcast hosted by venture-capital firm Andreessen Horowitz, Casey said, “I just love Bitcoin, I just think it is so interesting.” He also called bitcoin “one of the coolest things that has ever been created by people.”
Capital Group’s History and Bitcoin Strategy
Capital Group was founded in 1931 and is based in Los Angeles. It manages about $3 trillion in assets. The firm is known for being cautious. It avoided the dot-com bubble in the 1990s and usually stays away from risky trends. This makes its support for bitcoin, which can be very volatile, especially notable.
Capital Group’s bitcoin exposure mainly comes from investing in public companies that hold bitcoin on their balance sheets. These companies are often called “Bitcoin treasuries.”
Investments in Bitcoin-Holding Companies
Instead of buying bitcoin directly, Capital Group invests in companies that own bitcoin. One key investment is in MicroStrategy, a company led by founder Michael Saylor. MicroStrategy is one of the largest corporate holders of bitcoin.
In 2021, Capital Group spent over $500 million to buy a 12.3% stake in MicroStrategy. This made Capital Group the company’s second-largest shareholder after Saylor. Even after some selling and share changes, Capital Group still owns 6.62% of MicroStrategy. This stake is now worth about $6.2 billion. MicroStrategy’s stock has risen over 2,200% in the last five years.
How Capital Group Sees Bitcoin
Casey and his team treat bitcoin-focused companies like they would companies dealing in gold or oil. Casey told the Wall Street Journal, “We view Bitcoin as a commodity.” This means they focus on things like company balance sheets, transparency, liquidity, and management. They are less concerned about short-term price changes.
Capital Group also invested in other bitcoin-related companies. They bought 5% of Metaplanet, a Japanese hotel company that supports bitcoin. They also own shares in MARA Holdings, a major bitcoin mining company. These investments show Capital Group’s belief that bitcoin can be a store of value.
Bitcoin as a Store of Value
For Casey, bitcoin is not just a trade. He believes bitcoin is replacing gold as a modern store of value. Gold makes up about 2% of global wealth. Casey thinks bitcoin can reach that level as more people start using it.
Capital Group’s growing investments in bitcoin and bitcoin companies highlight a major shift. A cautious and old investment firm is now betting big on the future of bitcoin.
