Capital Group, one of the world’s oldest and most conservative investment firms, has become one of the biggest mainstream backers of bitcoin.
What started as a $1 billion bet on companies holding bitcoin, has grown to over $6 billion, a major milestone in Wall Street’s relationship with the scarce digital asset.
Mark Casey, an equity portfolio manager at Capital Group’s San Francisco office with more than two decades at the firm, has an interesting take on bitcoin.
He’s a value investor in the Warren Buffett and Benjamin Graham mold, and has surprised many by being one of the most vocal Bitcoin advocates among traditional finance executives.
“I just love Bitcoin, I just think it is so interesting,” Casey said on a podcast hosted by venture-capital firm Andreessen Horowitz. He even called it “one of the coolest things that has ever been created by people.”
Founded in 1931, the Los Angeles-based Capital Group manages about $3 trillion and is known for being cautious.
It avoided the dot-com bubble in the 1990s and has traditionally shied away from speculative manias. That’s why its embrace of Bitcoin, a volatile and often criticized asset, has gotten so much attention.
The firm’s bitcoin exposure comes mainly through public companies that hold bitcoin on their balance sheets, often referred to as “Bitcoin treasuries.”
Related: Public Companies Now Hold Over 1 Million Bitcoin
Instead of buying bitcoin directly, Capital Group has invested heavily in companies like Strategy, which transformed itself into one of the largest corporate holders of bitcoin under founder Michael Saylor.
In 2021, Capital Group spent over $500 million to buy a 12.3% stake in Strategy, becoming the company’s second-largest shareholder after Saylor.
Even after some trimming and share dilution, the stake is 6.62% and is now worth about $6.2 billion, thanks to Strategy’s stock surging over 2,200% in the past five years.
Casey and his team view Bitcoin-focused companies the same way they would commodity firms that deal in gold or oil.
“We view Bitcoin as a commodity,” Casey told the Wall Street Journal. This means they focus on balance sheets, disclosure standards, liquidity, and governance rather than short-term price swings.
That’s the same approach they’re taking with other bets. They recently bought 5% of Metaplanet, a Japanese hotel operator that went all in on bitcoin, and they also own shares in MARA Holdings, a major bitcoin miner.
Together, these positions go beyond Strategy and show Capital Group’s belief that bitcoin will be a store of value.
For Casey, bitcoin is more than a trade. He thinks it’s replacing gold as a modern store of value and will eventually surpass it. Gold accounts for about 2% of global wealth and Casey thinks bitcoin can catch up as adoption grows.
