Surprise! An ESG-Conscious Giant Increases Indirect Exposure to Bitcoin

By Sead Fadilpašić

Source: Adobe/uflypro

In the midst of major and ongoing ESG (environmental, social, and governance) debate, an ESG-conscious US-based investment giant, Capital Group, is increasing its indirect exposure to bitcoin (BTC). This time, via a more than half a billion dollars investment into software developer and major BTC bull MicroStrategy, while several more crypto-related companies are already on its investment list.

A division of major US asset management firm Capital Group, Capital International Investors (CII), has purchased 12.2% of MicroStrategy’s (MSTR) common stock, per a filing to the US Securities and Exchange Commission, dated June 30 and signed on July 12.

MSTR price chart:

Source: nasdaq.com

This large investment might look surprising, given that ESG-related worries are believed to be among the main causes that accelerated a major correction in the market. Bitcoin has been criticized far and wide lately for its energy consumption, while analysts are still hard at work debunking myths about Bitcoin mining and explaining it.

Meanwhile, 90-year-old Capital Group says that they believe that "ESG is integral to successful investing," and that they are "systematically incorporating environmental, social and governance issues into our investment process," which could "generate better long-term outcomes" for their clients.

ESG does not represent a separate process or "add on" step, according to their policy statement.

Also, per the Principles for Responsible Investment (PRI) Reporting Framework, Capital Group has earned sustainability scores of A or A+ in every category applicable to them.

At the same time, MicroStrategy has been steadily acquiring BTC that is being ignorantly accused of "boiling the oceans." According to the latest available data, the company is now among the biggest BTC holders as it owns BTC 105,085, acquired for around USD 2.741bn at an average price of USD 26,080 per BTC. This stash is worth around USD 3.5bn today.

Moreover, MicroStrategy is not the only way Capital Group has indirectly invested in the world's first crypto, which can be seen by a quick look into their funds - they are exposed to BTC and other cryptoassets through more of their investments in companies that are already offering crypto-related services or are planning to do so.

The New Economy Fund shows investments in CME Group, Square, PayPal, and Visa, for example, with the total market value of the purchased shares of USD 589m.

New Perspective Fund has also invested in PayPal, CME, and Visa, as well as in Tesla, BlackRock, Bank of America, Intercontinental Exchange (the company behind the Bakkt app), and SoftBank, the total market value of which is nearly USD 13.7bn.

Lastly, some of their other funds show similar investments as well, such as Capital Income Builder and the Income Fund of America.

Capital Group says that, as of December 31, 2020, they managed more than USD 2.3trn in equity and fixed income assets for millions of individuals and institutional investors around the world.

Cryptonews.com has reached out to Capital Group for comment.

At 11:52 UTC, BTC trades at USD 33,199 and is down by 1% in a day and 2% in a week. The price almost halved from its all-time high of around USD 65,000, reached in April this year.