Canada’s $195 Billion State-Owned Fund Invests $219 Million in MicroStrategy

• The Alberta Investment Management Corporation purchased a $219 million stake in MicroStrategy in its first investment in a crypto company.
• It joins three other Canadian firms with MicroStrategy holdings worth over $100 million just days after the American company pushed BTC holdings to 818,334.

The Alberta Investment Management Corporation (AIMCo), one of Canada’s largest public funds, with nearly $200 billion under its management, has invested over $200 million in MicroStrategy stock.

In a regulatory filing, AIMCo revealed that it had acquired 1.38 million MSTR shares in its first crypto-related investment. It also becomes the first time a Canadian province has invested in Bitcoin exposure.

With $195 billion in assets under its management, AIMCo manages dozens of public funds and pensions, including Alberta’s rainy-day fund, the Heritage Savings Trust Fund. One of its primary goals is to diversify Alberta’s wealth from oil and gas by investing in real estate, global infrastructure and technology.

This diversification strategy has now set its sights on Bitcoin with the MicroStrategy investment. The company has become the best indirect route for large institutions and investment funds to bet on BTC without having to deal with the complexities of setting up wallets and investing in advanced security measures.

Betting on MicroStrategy’s Bitcoin Treasury

AIMCo joins some of Canada’s largest companies that have invested in the American software company. They include the National Bank of Canada, which is one of the largest holders of MSTR stock globally, with 1.47 million shares worth $273 million at the time of purchase back in early December last year.

The Royal Bank of Canada has also invested heavily in MicroStrategy. After its latest purchase, it now holds over $230 million in MSTR stock. Others include the Canada Pension Plan Investment Board (CPPIB) and the investment arm of the Toronto-Dominion Bank with around $100 million in stock each. Others include Sun Life Financial, the Bank of Montreal and the $300 billion Public Sector Pension Investment Board.

AIMCo is not the first state-wide pension fund to invest in MicroStrategy. The State Teachers Retirement System of Ohio, its equivalent in the US, disclosed a purchase of 93,000 shares last month.

Investing in crypto companies has not always worked out for Canadian firms, however. When Sam Bankman-Fried’s FTX collapsed, the Ontario Teachers’ Pension Plan lost $95 million invested in the exchange and faced significant public and political backlash.

A year earlier, Caisse de dépôt et placement du Québec lost $150 million when crypto lending firm Celsius Network imploded. The fund’s CEO stated that it would not invest again in crypto for the foreseeable future.

Is MSTR’s Bitcoin Strategy Sustainable?

MicroStrategy is the largest public Bitcoin holder today, with 818,334 BTC, currently valued at $63.1 billion, according to Bitcoin Treasuries. With an average cost per BTC of $75,532, the company is on a 2.1% profit at the current prices. Notably, the BTC stash has become more valuable than the entire company, whose market cap stands at $57 billion.

In its latest investment, the company purchased 3,273 BTC at an average price of $77,906, valued at $255 million.

However, some analysts and financial experts have questioned the sustainability of this strategy. One of these is Peter Schiff, a renowned voice in the industry, who has called founder Michael Saylor a ‘fraud’ and predicted that MicroStrategy investors will lose it all eventually.

Others have questioned Saylor’s narrative that he will keep accumulating even if BTC drops 90%. As one analyst pointed out, “Teachers. Firefighters. State employees. Their retirement savings are sitting inside a company that just posted a $12.4 billion loss and whose chairman’s contingency plan is ‘we’ll figure it out.’ That’s STUPID.”

Meanwhile, BTC trades at $77,100, gaining slightly over the past day despite a 25% dip in its trading volume.

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