Vanguard, one of the world’s top asset managers, has become the largest institutional shareholder of Strategy, which is widely seen as a proxy for Bitcoin, despite previously labeling the crypto as speculative and lacking inherent value.

According to Bloomberg News, Vanguard now owns more than 20 million shares of Strategy, representing nearly 8% of the company’s Class A common stock.

The investment positions Vanguard above Capital Group Cos. as the Bitcoin firm’s largest shareholder, potentially cementing that lead in the fourth quarter.

The development comes as a striking contradiction to Vanguard’s long-standing stance on digital assets. Executives at the $10 trillion fund have repeatedly stated that Bitcoin is not “appropriate” for long-term investors, calling it an “immature asset class” with “no inherent economic value.”

They have also described crypto as more akin to speculation than investment, cautioning against its volatility and the risk it poses to portfolio stability.

However, Vanguard has accumulated a significant stake in Strategy through its passive index investment strategies. Strategy has transformed itself from a business intelligence firm into one of the most prominent corporate holders of Bitcoin, now owning over 601,550 BTC as of July 15.

Industry analysts point to the unintended consequences of passive index investing, which may force firms like Vanguard to gain exposure to assets they openly criticize.

Bloomberg noted that this irony highlights the broader tension between index-based strategies and the active ideological positions of asset managers.

With nearly $9 billion in Strategy stock linked to index fund flows, some critics argued that the situation exposes a contradiction in traditional finance.

Matthew Sigel, head of digital assets research at VanEck, called it “institutional dementia” in a social media post and criticized the firm for mocking Bitcoin publicly while simultaneously fueling exposure to it through indexing.

The contradiction raises questions about whether institutional finance can continue to resist crypto on philosophical grounds while remaining beholden to automated investment mandates that tell a different story with capital allocation.

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