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Bear with me for a minute as I’m admittedly burying the lead. Vanguard is a lot of things, many of which are positives for advisors and retail investors.
Chief among those favorable traits are the firm’s reputation as a low-cost leader and an issuer of active and passive funds that are largely easy to understand. The company shies away from exotic, glitzy products, focusing on “meat and potatoes” funds and it’s a strategy that served it and its clients well.
One thing Vanguard is not is a fan of cryptocurrency in the exchange traded funds wrapper. Soon after spot bitcoin ETFs came to market in the US in January 2024, Vanguard made clear it would not be issuing a competing product of its own. It won’t even allow purchases of other issuers’ crypto-based ETFs on its trading platform.
Conversely, direct rivals such as Charles Schwab and Fidelity aren’t so crypto-skittish. Schwab already offers equity-based cryptocurrency ETFs of its own and could start offering spot bitcoin trading next year. For its part, the Fidelity Wise Origin Bitcoin Fund (FBTC) is one of the largest ETFs in the category.
Vanguard Meets Strategy
Now for the even more interesting part. Despite Vanguard’s reluctance to embrace digital currency in any way, it’s now the largest hold of Strategy (NASDAQ: MSTR) shares – perhaps the most bitcoin-correlated stock and undoubtedly the biggest corporate owner of that digital currency.
“Vanguard Group Inc has filed an SCHEDULE 13G/A form with the Securities and Exchange Commission (SEC) disclosing ownership of 20,587,011 shares of MicroStrategy Incorporated (US:MSTR). This represents 8.55 percent ownership of the company. In their previous filing dated 2025-01-30 , Vanguard Group Inc had reported owning 16,303,720 shares, indicating an increase of 26.27 percent,” according to Fintel.
In other words, due to the magic of fund flows, Vanguard has been forced to gobble shares of a stock that is probably considered taboo inside Malvern, Pa. walls. Those are my words, not Vanguard’s.
Point is for the crypto/ETF/fund flows nerds out there, it’s certainly an interesting twist of fate that Vanguard is the largest institutional owner of Strategy stock.
More Details
To be clear, Vanguard is free to hold the opinion (apparently unwavering) it holds on bitcoin. It’s a tad draconian to prevent clients from buying bitcoin ETFs – arguably a somewhat safe way to approach the cryptocurrency for many investors – but Vanguard is free to enforce such a policy.
As for the asset manager’s ownership of Strategy stock, it’s noteworthy in aggregate, but less so at the individual fund level. Among ETFs, the Vanguard Extended Market ETF (NYSE: VXF) is the firm’s ETF with the largest weight to Strategy, but it’s just 1.4%. Twenty-seven ETFs have larger allocations to Strategy, according to ETF Research Center data.
Approximately 15 Vanguard ETFs hold shares of Strategy, a reasonable amount considering the stock’s market value of $126 billion. Of course, given Vanguard’s asset-gathering acumen, it’s possible that over time, its Strategy holdings will increase. All that while the issuer is likely to remain crypto-resistant. Now that’s interesting.
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