Bitcoin (BTC-USD) is set to undergo its fourth halving this month and the community is riled up as ever in anticipation for the event. Amidst this excitement, another set of players — institutional investors — are taking notice.
The halving hasn’t necessarily always led to an immediate price surge, but the sheer enthusiasm and attention surrounding the BTC event is laying the groundwork for future favorable price movements. Investors that got in earlier are being set up to reap handsomely when the cryptocurrency rebounds.
Back in February, boutique investment bank Benchmark observed that Bitcoin’s previous bull runs were tied to its halving events. For example, the 2020 halving preceded the crypto’s “dramatic rise from $8,572 to an all-time high of $67,566 in 2021.”
With that said, these are the institutional names betting on Bitcoin before the April halving.
MicroStrategy (MSTR)
MicroStrategy (NASDAQ:MSTR) first bought into Bitcoin as an inflation hedge in August 2020. The company hasn’t looked back since.
After countless buys over the years, the business intelligence software firm now has 214,246 BTC in its stash — making it the largest BTC holder of any corporation. While some observers believe MicroStrategy’s stockpiling of Bitcoin is financially imprudent given its volatility, others have lauded the acquisition strategy.
In the same Benchmark report mentioned earlier, analyst Mark Palmer recommended buying MicroStrategy shares because he believes the company is well-positioned to benefit from increased institutional demand for Bitcoin. Palmer set a price target of $990 for MSTR stock in February. Shares now trade for under $1600 apiece.
Palmer’s price projection for MSTR stock was informed by the premise that Bitcoin could very well hit $125,000 by the end of 2025. The analyst contended that MicroStrategy offers investors a “timely play” on the upcoming Bitcoin halving.
BlackRock (BLK)
BlackRock’s (NYSE:BLK) dalliance with Bitcoin is a complete 180 from its former stance on the digital asset. CEO Larry Fink is on record saying that BTC is an “index of money laundering.”
The firm’s about-face on the crypto has been a response to growing demand. In a 2022 announcement, BlackRock noted that it had set up a spot Bitcoin private trust for U.S. institutional clients.
At the time, the largest asset manager in the world (with some $10 trillion in assets under management) said that it was “still seeing substantial interest from some institutional clients” despite the then-prevailing crypto winter. Just the week prior, BlackRock had partnered with Coinbase (NASDAQ:COIN) via Coinbase Prime to expose its investors directly to Bitcoin.
That demand for BTC exposure from clients remains consistent to date. BlackRock Head of Digital Assets Robert Mitchnick recently said that the pioneering cryptocurrency has been “overwhelmingly the number one focus” for crypto-interested clients.
Last year, BlackRock was at the forefront of institutions clamoring for spot Bitcoin exchange-traded fund (ETF) approval. The firm’s iShares Bitcoin Trust (NASDAQ:IBIT) is now one of the most successful Bitcoin ETFs after the U.S. Securities Exchange Commission (SEC) approved these funds in January, accumulating nearly $14 billion in inflows so far.
Founders Fund
Back in February, Reuters revealed that Peter Thiel’s venture capital (VC) firm Founders Fund had allocated $200 million to Bitcoin and Ethereum (ETH-USD) in 2023 — half on each coin “from late summer to early fall last year.”
Bitcoin was changing hands for under $30,000 during that period. Since then, the coin has more than doubled, touching an all-time high of nearly $74,000 in March.
With Bitcoin ETFs still hot and the halving coming closer, BTC is poised for an even stronger comeback.
Reuters notes that the Founders Fund is an early institutional investor in BTC. According to the publication, the VC firm began investing in Bitcoin in 2014 and profited $1.8 billion before selling ahead of the crypto market’s dramatic collapse in 2022.
On the date of publication, Hope Mutie did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
