In a surprising turn of events, Vanguard, a long-time Bitcoin skeptic, has become the largest institutional shareholder of Strategy, a company renowned for holding a significant amount of Bitcoin. This move has raised eyebrows, given Vanguard's consistent warnings about the volatility of crypto and its refusal to offer spot Bitcoin ETFs to its clients.

Vanguard now holds over 20 million shares of Strategy, representing approximately 8% of the company's outstanding Class A common stock. This stake is valued at around $9.26 billion. The investment makes Vanguard the top shareholder in Strategy, surpassing Capital Group Cos.

Strategy, formerly known as MicroStrategy, has transformed its business model since 2020, with Bitcoin as its primary treasury reserve asset. As of July 2025, the company holds 601,550 BTC, worth over $70 billion. Strategy's shares have moved in sync with Bitcoin price swings, making it an indirect investment vehicle for the cryptocurrency. Recently, Strategy acquired an additional 4,225 BTC for $472.5 million, further solidifying its position as the leading corporate Bitcoin holder.

Vanguard's increased exposure to Strategy wasn't a strategic decision to embrace Bitcoin. Instead, it was triggered by Strategy's inclusion in various stock indexes, such as the Nasdaq 100. Vanguard's passive investment policy requires it to track these indexes, leading to an automatic acquisition of Strategy shares.

This situation highlights a contradiction between Vanguard's public stance on Bitcoin and its investment portfolio. The firm has repeatedly dismissed Bitcoin as a speculative asset lacking intrinsic value. Executives have described it as an "immature asset class" with "no inherent economic value," unsuitable for long-term investors.

Despite this criticism, Vanguard's funds, including the Total Stock Market Index Fund (VITSX), the Vanguard Extended Market Index Fund (VIEIX), and the Vanguard Growth ETF (VUG), now include Strategy. This indirect exposure to Bitcoin has sparked criticism and amusement. Some analysts have pointed out the irony of Vanguard, a known Bitcoin bear, becoming the largest shareholder of a company that aggressively accumulates the cryptocurrency.

Michael Saylor, Strategy's executive chairman, views Vanguard's investment as a "powerful signal of growing institutional support for Bitcoin". He believes it reflects the acceptance of Bitcoin as a legitimate reserve asset within the traditional financial community.

While Vanguard remains silent on its broader crypto strategy, this move signals that even the most conservative financial giants are finding pathways into the digital asset ecosystem. Whether intentional or not, Vanguard's investment in Strategy demonstrates how intertwined traditional finance and the cryptocurrency market are becoming.