Vanguard Group's $700 Million Entry, MSTR Bottom Reached?

Original Title: "Vanguard Group's $7 Billion Entry, MSTR Bottom Reached?"

Original Author: Ding Dang, Odaily Planet Daily

On January 20, Strategy once again disclosed the purchase of 22,305 bitcoins, worth approximately $2.13 billion. This is the largest single purchase by Strategy since 2025.

Over the past few months, Strategy's stock price has continued to fall from a high of $457, with a drop of nearly 200%. Doubts surrounding Strategy have also been escalating. From high leverage and refinancing capacity to Bitcoin price volatility and stock price transmission mechanisms, almost all negative logic has been rehashed. Especially after mNAV fell below 1, the voices of pessimism about MSTR have been incessant.

At the same time, index provider MSCI has released a signal that it may remove MSTR from its index. If this were to happen, it could theoretically trigger passive selling of around $8.8 billion; and Strategy's own calculations also show that in extreme cases, a $2.8 billion stock liquidation may be triggered.

The panic seems to be escalating... at a time when the market is worried about whether it will "sell Bitcoin" or "be able to refinance again," Strategy has chosen to embody the label of a firm believer in Bitcoin with the clearest and most powerful stance.

A bottom is not a price, but a moment when a behavior begins to emerge

Strategy's highly concentrated asset structure, reliance on refinancing in the capital markets, and valuation model deeply tied to the price of Bitcoin are its endogenous genes. Therefore, when the market trend reverses, these structural features will not "suddenly fail," but will amplify volatility in a more drastic way. The rapid decline in price will, in turn, reinforce the pessimistic narrative, escalating the risk in an emotional sense, repeatedly discussed.

So, when almost everyone is extremely bearish, and all the news is negative, it often means that the bad news may be in the process of digestion, or even has been digested. This is why Buffett's statement, "Be fearful when others are greedy" is repeatedly quoted.

Therefore, what is truly worth observing in the market is not whether these negative factors are valid, but whether in the most extreme emotional state, when bad news still exists, has a "lone brave soul" appeared in the market choosing to be long on MSTR?

The answer is: Yes, and not just one type.

Vanguard: Institutional Funds Start to Get Involved

Vanguard is one of the world's largest asset management companies, with assets under management exceeding $12 trillion. Since the beginning of 2026, two of its index funds have disclosed purchases of MSTR, totaling approximately $707.5 million in additional holdings.

It is important to note that this is not an active expression of a bullish view, as Vanguard's holdings are mostly automatically adjusted based on changes in index constituents, meaning the current purchases may stem from passive index-tracking demand.

On January 20, the Vanguard Value Index Fund (VVIAX) disclosed its initial purchase of MSTR stock, acquiring a total of 1.23 million shares valued at around $202.5 million. This is a value-oriented index fund that focuses on large-cap stocks that are considered undervalued by the market, with core selection criteria including lower price-to-earnings ratio, price-to-book ratio, and higher dividend yield.

A similar situation has occurred in another mid-cap stock index fund, the Vanguard Mid-Cap Index Fund Institutional Shares (VMCIX). The fund disclosed the purchase of 2.91 million shares of MSTR, valued at around $505 million. MSTR's market capitalization has continued to grow, making it eligible for inclusion in the mid-cap index, prompting the fund to increase its holdings to match the index weight.

Overall, Vanguard's two purchases are likely driven more by index fund tracking behavior rather than active investment. However, it is within this "opinion-neutral" fund inflow that a key shift is occurring: MSTR is institutionally being incorporated into traditional asset allocation systems as a compliant Bitcoin risk vehicle.

Pension Fund Exploration: The Signal Behind Small Positions

In the more conservative realm of pension funds, the Louisiana State Employees' Retirement System (LASERS) disclosed holding 17,900 shares of MSTR as of December 31, 2025, valued at approximately $3.1 million, representing about 0.02% of its roughly $16 billion in assets.

This is not a radical allocation, and it can even be said to be extremely small.

However, LASERS is the Louisiana public employee retirement system, managing the retirement assets of over 100,000 state employees (including teachers and other public workers), with a total size of approximately $15.6 billion. The fund's portfolio is mainly concentrated in large U.S. tech stocks such as NVIDIA, Apple, Microsoft, Amazon, and Alphabet. In such a portfolio, the emergence of MSTR, can we consider it as: indirectly gaining Bitcoin exposure through a publicly traded company structure, being seen as a discussable and exploratory option by some state-level public funds. Although LASERS' holding of MSTR is small, it represents a cautious and preliminary interest in crypto assets.

When actively managed funds choose to stand on the other side

Unlike passive index funds, the choice of actively managed funds is closer to a direct assessment of risk and return.

By the end of the fourth quarter of 2025, the globally renowned quantitative trading and market-making firm Jane Street Group disclosed that its MSTR holdings increased by 51.72%, with the number of shares held rising from approximately 11.0588 million shares to 16.7784 million shares, and at the same time holding a large-scale call option position.

During the same quarter, Capital International Investors also disclosed that its MSTR holdings increased by 713.07%, with the number of shares rising from approximately 1.5589 million shares to 12.6749 million shares.

In addition, BitMEX co-founder Arthur Hayes also stated that his most core trading strategy this quarter is to long Strategy (MSTR) and Metaplanet, using them as high-leverage tools to bet on the Bitcoin trend.

Several asset management companies, including Bernstein, TD Cowen, The Benchmark Company, still maintain a buy rating on MSTR. For example, TD Cowen stated that despite the pressure on short-term yields, as the Bitcoin price rebounds, key performance indicators for the 2027 fiscal year are expected to improve.

The Last Stand

CoinDesk analyst James Van Straten has offered an insightful observation: In this current cycle, Strategy (MSTR) has taken on about 75% of the drawdown, allowing Bitcoin itself to not have to undergo an equivalent drop, as the volatility shifted from spot Bitcoin to MSTR common stock.

At the same time, Michael Saylor massively issued stock at around 1x mNAV, effectively acting as a final risk absorber. Within this valuation range, the newly incoming risk was transferred to investors willing to buy MSTR at that price level, rather than continuing to pressure the Bitcoin spot market, thereby somewhat curbing the formation of a bear market.

The significance of this perspective is that it redefines the relationship between MSTR and Bitcoin. MSTR is no longer just a high-leverage mapping of Bitcoin, but is gradually evolving into an intermediary layer that bears, transmits, and releases Bitcoin's volatility in the current market structure. Due to its stock's higher liquidity, mature shorting mechanisms, and rich options tools, when market risk aversion is on the rise, investors may prefer to express their risk assessment of Bitcoin through selling or hedging MSTR instead of directly selling Bitcoin spot.

Of course, the institutions and individuals choosing to go long on MSTR may not necessarily be making the right choice. However, their presence alone is worth serious observation. Because the structural bottom of the market often emerges not after a sentiment improvement, but at a moment when emotions are still extreme, yet some have chosen to act contrarily.

Therefore, observing investor behavior on MSTR at this stage is actually observing how they perceive Bitcoin's risk, expectations, and position in the cycle.

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