BlackRock’s Investment in MicroStrategy (MSTR) – A Bitcoin Proxy Play
Stake Size & Ownership: BlackRock Inc. is a significant shareholder in MicroStrategy (recently rebranded as Strategy Inc.), holding roughly 5–6% of the company’s outstanding stock in 2025. As of April 2025, BlackRock disclosed owning 14.19 million MicroStrategy shares (~5.8% of shares outstanding) . This was a sharp increase from late 2024, when it held about 11.2 million shares (a 5.0% stake) . Historically, BlackRock’s ownership has fluctuated with MicroStrategy’s transformations – at one point in early 2021 it owned over 16% of the company, a stake that later dropped below 8% as market conditions changed .
Timeline of BlackRock’s Stake in MicroStrategy: BlackRock has been an investor in MicroStrategy for over a decade, initially as a passive institutional holder. Key milestones in its ownership are outlined below:
| Date (Filing) | BlackRock’s Reported Stake | Ownership % | Notable Context |
| Feb 2020 (13G) | ~1.40 million shares | 17.0% | Pre-Bitcoin pivot: MicroStrategy was a mid-cap enterprise software firm. BlackRock held a high % through index funds and value funds. |
| Feb 2021 (13G) | ~1.18 million shares | 16.3% | Bitcoin strategy begins: MicroStrategy had just started buying Bitcoin (Aug 2020). BlackRock’s % remained high, reflecting prior holdings. |
| Oct 2021 (13G) | ~0.56 million shares | 7.2% | Post Bitcoin rally: MSTR’s stock price soared with Bitcoin’s 2021 surge, and BlackRock significantly trimmed its position (or was diluted by new share issuance). |
| Dec 31, 2024 (13G filed Feb 2025) | ~11.2 million shares | 5.0% | Stake crosses 5%: After MicroStrategy’s 10-for-1 stock split (Aug 2024) and additional share issuances, BlackRock’s holdings grew to 5% of shares, triggering a disclosure filing. |
| Apr 2025 (13G/A) | 14,193,525 shares | 5.8% | Increasing exposure: BlackRock boosted its stake by ~50% over late-2024 levels, amid MicroStrategy’s continued Bitcoin accumulation and share offerings. |
Strategic Reasons for the Investment: BlackRock’s growing stake in MicroStrategy is widely seen as a proxy for Bitcoin exposure. MicroStrategy has transformed into a “Bitcoin Treasury” firm, holding over 580,000 BTC on its balance sheet (≈$63 billion as of mid-2025) . By investing in MicroStrategy stock, BlackRock gains indirect access to Bitcoin’s price appreciation without holding crypto directly. Analysts note that MicroStrategy is an “attractive proxy” for leveraged Bitcoin exposure – essentially a publicly traded Bitcoin fund with additional enterprise software business on the side . This aligns with BlackRock’s increasing interest in digital assets (e.g. its 2023 filing for a spot Bitcoin ETF). Other possible motives and context include:
- Index Inclusion & Passive Exposure: MicroStrategy is part of stock indices (e.g. Russell 2000); BlackRock’s index-tracking funds naturally hold it. The company’s 2020–2023 issuance of new shares (to buy Bitcoin) expanded the shareholder base – BlackRock’s absolute share count rose simply by maintaining its index weight, even as its percentage holding was diluted . By late 2024, however, BlackRock actively added shares, suggesting conviction beyond passive rebalancing .
- Conviction in Bitcoin’s Upside: BlackRock CEO Larry Fink has spoken about “digital gold” potential in crypto. The timing of BlackRock’s stake increase – ahead of anticipated Bitcoin ETF approval – indicates a strategic bet on Bitcoin’s long-term value. Holding MicroStrategy gives BlackRock’s clients exposure to Bitcoin’s upside and the ability to earn corporate stock returns on top of the underlying BTC holdings .
- Influence and Market Insight: With a >5% holding, BlackRock can monitor MicroStrategy’s governance and Bitcoin strategy more closely (though filings indicate the stake is passive ). This position also signals to the market a level of validation – that the world’s largest asset manager is comfortable with MicroStrategy’s unconventional balance sheet strategy.
Market Reaction and Commentary: News of BlackRock’s stake increases have been bullish for MicroStrategy’s stock. When BlackRock disclosed boosting its ownership to 5% in early 2025, MSTR shares jumped ~5% in pre-market trading . Investors interpreted BlackRock’s involvement as a vote of confidence in MicroStrategy’s Bitcoin strategy. One retail trader quipped that “if the stock is good enough for BlackRock, it’s good enough for me.” Analysts at Keefe, Bruyette & Woods initiated coverage with an Outperform rating, citing MicroStrategy’s ability to “generate additional returns through accretive Bitcoin purchases” and its “valuation exceeding net asset value” (i.e. investors pay a premium for the Bitcoin play) . However, skeptics like economist Peter Schiff have warned that MicroStrategy is overvalued and vulnerable if Bitcoin’s price falters – highlighting that both BlackRock and MicroStrategy are now heavily exposed to crypto market swings . Overall, BlackRock’s backing has enhanced market perception of MicroStrategy, reinforcing its identity as a mainstream-accessible Bitcoin investment vehicle.
BlackRock’s Investment in Sarcos Technology & Robotics (STRC/
PDYN
): Robotics to AI
Background: Sarcos Technology and Robotics Corporation (ticker STRC), now known as Palladyne AI Corp (PDYN), is a small-cap company focused on robotic systems and, more recently, AI software for autonomy. BlackRock became involved with Sarcos when the company went public via a SPAC merger in 2021. In that deal, Sarcos raised $496 million and debuted at a $1.3 billion valuation . BlackRock was a key anchor investor in the SPAC financing, participating alongside Millennium Management, Palantir and others to provide capital and credibility . This early backing indicated BlackRock’s interest in the robotics and industrial automation theme.
Stake Size & Timeline: BlackRock initially acquired a substantial holding in Sarcos through the SPAC PIPE and sponsor shares. According to SEC filings, by mid-2022 BlackRock’s funds held 19.69 million Sarcos shares . This made BlackRock one of Sarcos’s top shareholders (exact percentage not stated, but likely in the high single digits). Over time, BlackRock’s stake evolved with Sarcos’s turbulent journey:
- 2021 (Post-SPAC): BlackRock and affiliates obtain ~19.7 million shares of Sarcos through the de-SPAC transaction and PIPE investment. Sarcos’s vision of commercializing exoskeleton robots to augment human workers aligned with BlackRock’s thematic focus on innovative tech solving big problems. (Sarcos’s CEO touted that its robots would “increase productivity, save lives and reduce injuries” in physically demanding jobs – a value proposition likely attractive to ESG-oriented institutional investors.)
- 2022–2023: As Sarcos struggled to meet its early expectations, BlackRock’s ownership percentage stayed above the 5% disclosure threshold. In February 2023, BlackRock filed a Schedule 13G reporting 10,135,352 shares (about 6.6% of Sarcos) . The reduction from the initial 19.7 million shares suggests BlackRock trimmed its position by ~50% (possibly selling some shares as the stock price slid), or that its stake was diluted by additional share issuance (Sarcos acquired another robotics firm, RE2, in 2022, issuing new shares). Even after this decline, BlackRock remained one of the largest institutional holders of Sarcos.
- 2024: Facing cash burn and a collapsing stock price, Sarcos undertook drastic changes. In June 2023 it executed a 1-for-6 reverse stock split to avoid Nasdaq delisting (the stock had fallen under $1) . The company then pivoted its business model – shifting from building robotic hardware to developing AI software for robots. In March 2024, Sarcos rebranded itself as Palladyne AI Corp., emphasizing a “new focus on brain over brawn” (i.e. software brains for robots rather than physical brawn) . Its Nasdaq ticker changed from STRC to PDYN. BlackRock, for its part, appears to have held onto its stake through this tumultuous pivot, potentially in hopes that an AI-focused strategy could revive the company’s prospects.
- 2025: As of April 2025, BlackRock’s investment in the now-Palladyne AI was equivalent to 3,086,377 shares, representing about 10.9% ownership . This percentage increase (from ~6.6% to ~10.9%) is largely due to Sarcos’s dramatically reduced share count after the reverse split and shareholder exits. There is no indication BlackRock aggressively added to its position; rather, it became a bigger fish in a smaller pond as the company’s market cap shrank. BlackRock filed an updated 13G reflecting this ~10%+ stake , signaling it still held millions of shares even after the business pivot.
Strategic Rationale: BlackRock’s involvement with Sarcos/Palladyne can be seen in the context of its broader strategy to invest in emerging technologies like robotics and AI:
- Robotics & Future of Work Theme: In 2021, Sarcos fit into a narrative of industrial robotics revolutionizing labor. Its Guardian XO exoskeleton was aimed at augmenting human workers in construction, manufacturing, and defense. BlackRock’s participation in the SPAC funding round provided exposure to this cutting-edge technology. The presence of BlackRock (and other major funds) was viewed as an endorsement of Sarcos’s potential to disrupt “old-economy” industries with innovative tech . For BlackRock, which offers thematic funds (including robotics/AI ETFs), owning Sarcos early made strategic sense to capture upside in the robotics boom.
- Transition to AI Software: By 2024, artificial intelligence had overtaken hardware as the hot investment theme. Sarcos’s decision to pivot into AI (as Palladyne AI) aligns with this trend. The company shifted to developing machine-learning software that enables robots to “observe, learn, reason and act” like humans . This plays directly into the AI boom of 2023–2024, which saw investor enthusiasm for anything AI-related. BlackRock’s continued stake gives it a foothold in a speculative AI software play. It’s possible that BlackRock supported or at least tolerated the pivot because it transforms a struggling hardware maker into a leaner AI-focused firm – potentially a better story for future growth. In essence, BlackRock’s investment evolved from a pure robotics bet into an AI/robotics convergence bet. This mirrors BlackRock’s own emphasis on AI: (CEO Larry Fink has highlighted AI as a key investment area for the coming years, and BlackRock has launched products focusing on tech innovation.)
- Passive vs. Active Considerations: It’s worth noting that some of BlackRock’s Sarcos shares may be held via index funds (e.g. if Palladyne AI is in small-cap indices). However, BlackRock’s role as an anchor PIPE investor implies an active, discretionary decision by its private equity or opportunistic investment teams in 2021. That initial decision was likely driven by strategic partnership potential (BlackRock often seeks to back companies with long-term disruptive potential). Even as the company faltered, BlackRock did not completely exit – possibly to avoid realizing a loss, or because it saw optionality in the new AI direction.
Market Reactions & Commentary: Sarcos’s journey has been challenging, and the market’s reaction to BlackRock’s involvement has been mixed:
- SPAC Debut Optimism (2021): When Sarcos first announced its SPAC deal, the inclusion of BlackRock among the backers was viewed as a positive signal. It suggested that sophisticated investors believed in Sarcos’s vision. The stock traded around $10 (the SPAC baseline) upon merger. BlackRock’s stake wasn’t individually publicized then, but the fact of BlackRock’s participation in the PIPE was cited in press releases and likely gave comfort to some investors .
- Post-IPO Underperformance: Very soon after going public, Sarcos began underperforming. It failed to generate meaningful revenue from its robots and continually consumed cash . By late 2022 and 2023, the stock price had plummeted over 80%, showing that even marquee investors like BlackRock and Palantir underestimated the commercialization hurdles. There wasn’t much analyst coverage (given Sarcos’s small size), but the company’s own filings painted a grim picture – e.g. only two robots sold by late 2023 while hundreds had been projected . BlackRock did quietly cut its share count, as noted above, but remained a stakeholder.
- Pivot to AI – Cautious Reception: In March 2024, the rebranding to Palladyne AI and shift to AI software temporarily lifted the stock from all-time lows (the “AI” buzzword effect). The company’s press release emphasized delivering a “fundamentally superior type of intelligence” for robots with its AI platform . This narrative pivot was likely an attempt to attract a new base of investors focused on AI. Market reaction was muted, however. While the ticker change to PDYN and AI focus put the stock on the radar of some speculative traders, many existing investors had been burned – the stock remained under $2 after the reverse split (equivalent to pennies on the dollar pre-split). No major analyst upgrades followed; in fact, some commentators argued it was “too early to buy” Palladyne AI given its lack of revenue and uncertain path to monetization . BlackRock’s ~10% stake at this point may signal patience or simply inertia.
In summary, BlackRock’s investment in Sarcos/Palladyne exemplifies the risks of early-stage tech bets. It gave BlackRock exposure to the AI & robotics sector, but the outcome is still highly uncertain. The broader market sees Palladyne as a speculative turnaround story – one that will require significant proof of concept (successful deployment of its AI software in industry) to justify BlackRock’s continued backing.
Investments Tied to “Strategy”: BlackRock’s Stake in Strategy Inc.’s Preferred Securities
In addition to common stock, BlackRock has also invested in securities tied to “Strategy Inc.” (MicroStrategy) – notably the company’s unique Bitcoin-backed financing instruments. MicroStrategy has issued several perpetual preferred stock series (branded as “Strategy” shares) to raise capital for buying Bitcoin. BlackRock emerged as a significant holder in at least one of these offerings:
- STRC “Stretch” Preferred: In late 2022, MicroStrategy introduced a perpetual preferred stock dubbed “Stretch” (ticker STRC) – designed as a short-duration, high-yield instrument. It carries a floating dividend rate (adjusted monthly) targeting a ~$100 par value, and as of 2025 pays about 10.5% annual yield . In February 2023, BlackRock filed a Schedule 13G disclosing ownership of 10,135,352 shares of this Strategy Inc. – Preferred stock, equivalent to a 6.6% stake in that class . This made BlackRock one of the largest holders of MicroStrategy’s high-yield preferred shares. The investment likely reflects BlackRock’s appetite for yield-generating assets: at ~10%+, the STRC preferred offers a hefty coupon, albeit with high risk (essentially it’s debt-like funding backed only by MicroStrategy’s residual assets) . BlackRock may have purchased these shares for its income-focused or opportunistic credit funds, seeking to profit from MicroStrategy’s Bitcoin-fueled growth while earning reliable dividends.
- STRK “Strike” Preferred: MicroStrategy also issued a Series A convertible preferred in early 2025, nicknamed “Strike” (STRK), with an 8% fixed dividend and optional conversion into common stock (0.1 shares of MSTR per preferred) . This was a novel way to raise funds for more Bitcoin purchases . It’s unclear if BlackRock took a stake in the STRK offering at issuance; however, given BlackRock’s general participation in MicroStrategy’s financings, it’s possible some BlackRock-managed funds subscribed to STRK as well. (No public 13G filing for STRK by BlackRock is available at the time of writing – likely because the issuance was new in 2025 and any holdings might be below 5% or split among funds.)
- Context – Strategy Inc. Instruments: These “Strategy” preferred securities (tickers STRC, STRK, STRD, STRF, etc.) are part of MicroStrategy’s strategy to leverage its Bitcoin treasury. They offer investors different risk/return profiles – e.g. STRC with a variable high yield, STRK with equity upside – in exchange for capital that MicroStrategy deploys into Bitcoin . For BlackRock, investing in these can serve multiple strategic purposes:
- Earning high yields in a low-rate environment (at least at the time of purchase) with the bonus of Bitcoin-linked upside. Essentially, BlackRock can gain fixed-income-like returns from MicroStrategy’s preferreds plus participate indirectly in Bitcoin’s performance (since the company’s health and conversion options depend on BTC value).
- Supporting a portfolio company’s capital raise: By funding MicroStrategy’s Bitcoin acquisitions, BlackRock reinforces its broader crypto thesis. It’s a synergistic move – their equity stake benefits if MicroStrategy acquires more BTC and rises in value, and the preferred stake earns interest along the way.
- Risk Management: Of course, these instruments are not without risk – they rank junior to debt and are not collateralized by MicroStrategy’s Bitcoin holdings . BlackRock’s willingness to hold a sizeable portion suggests a measured risk-reward view, likely sizing the position small relative to its AUM. The fact that BlackRock did report a 6.6% holding in STRC indicates confidence in MicroStrategy’s creditworthiness and Bitcoin strategy (as of early 2023).
In summary, “entities tied to ‘Strategy’” refers to MicroStrategy’s affiliated instruments, and BlackRock’s investments here show that its interest in Strategy Inc. goes beyond common equity. It has sought to capitalize on MicroStrategy’s Bitcoin-centric financing strategies by purchasing those offerings. These moves complement BlackRock’s overall exposure: the common stock stake provides upside if Bitcoin soars, while the preferred stakes provide hefty income and some downside buffer (dividends) even if the stock underperforms.
Fit Within BlackRock’s Broader Strategy
BlackRock’s investments in MicroStrategy and Sarcos/Palladyne illustrate the asset manager’s balanced approach to innovation and diversification within its enormous portfolio. A few high-level observations on how these positions align with BlackRock’s goals:
- Thematic Exposure vs. Core Holdings: As the world’s largest asset manager, BlackRock typically holds blue-chip stocks across all industries via its index funds. However, it also tactically invests in thematic opportunities to capture emerging trends for its active funds and clients. MicroStrategy and Sarcos represent two such themes – digital assets (Bitcoin) and robotics/AI – that BlackRock has identified as transformative. By establishing stakes in these companies, BlackRock ensures it has “skin in the game” of potentially explosive innovation sectors (crypto and AI) without deviating from its diversified approach. These positions are relatively small in the context of BlackRock’s $9+ trillion AUM, but significant enough to matter if the themes play out.
- Synergy with Product Offerings: BlackRock has been developing investment products around cryptocurrency and blockchain (e.g. in 2023 it filed for a spot Bitcoin ETF and partnered with Coinbase for crypto trading ) and around technology/AI (it offers iShares ETFs for tech, robotics, and has AI-driven investment strategies). Owning MicroStrategy stock dovetails with its crypto initiatives – it provides BlackRock’s portfolio managers insight and exposure to Bitcoin’s dynamics ahead of a potential ETF launch. Likewise, involvement in Palladyne AI complements BlackRock’s narrative of being at the forefront of AI investing (even if through a very speculative play). These stakes can be seen as strategic holdings that underpin BlackRock’s credibility in those domains when marketing products to clients.
- Risk Management and Long-Term Horizon: Despite the excitement around Bitcoin and AI, BlackRock’s leadership is likely cognizant of the risks. The firm tends to invest with a long horizon and often in a passive capacity. In MicroStrategy’s case, BlackRock converted its position from a historically passive stake into a larger, active position only when it was comfortable with the company’s direction (Bitcoin accumulation) and perhaps the regulatory outlook for crypto. It filed Schedule 13G (indicating a passive intent) , meaning it does not seek to influence management – consistent with a long-term holder not an activist. For Sarcos/Palladyne, BlackRock weathered a dramatic downturn, which suggests patience and an understanding that nascent technologies can take time to pay off. By not panic-selling to zero, BlackRock keeps the option value if Palladyne’s AI pivot succeeds, embodying its philosophy of riding out volatility for potentially outsized gains.
- Market Perception: BlackRock’s involvement often confers a seal of approval. In the case of MicroStrategy, its accumulation of a 5%+ stake was interpreted as institutional validation of Bitcoin – a notable shift given that a few years prior, crypto was considered fringe. This helped propel positive sentiment for both MicroStrategy and Bitcoin . For Palladyne, BlackRock’s continued holding provided a lifeline of credibility (e.g. “even BlackRock hasn’t given up on it”). However, markets also recognize that BlackRock’s portfolio is so large that it can absorb losses; thus its presence is not a guarantee of success, especially in speculative small-caps. Analysts and media have pointed out that BlackRock’s growing influence in Bitcoin (via ETFs and MicroStrategy) could even invite concerns of market manipulation or outsized sway on crypto markets . BlackRock will need to navigate these perceptions carefully, balancing its pioneering foray into new asset classes with its fiduciary duty to minimize undue risk.
- Conclusion – Strategic Balance: The investments in MicroStrategy and Sarcos/Palladyne highlight BlackRock’s dual nature: it is at once conservative (largely passive, broad-based investor) and forward-looking (selectively backing cutting-edge trends). These stakes fit into a broader strategy of portfolio diversification – ensuring that BlackRock is exposed to key paradigm shifts (like the rise of Bitcoin as “digital gold” and AI’s disruption of industry) without betting the house on any single outcome. They also demonstrate BlackRock’s capacity to shape and participate in market narratives. By leveraging public filings (13Gs, etc.) and public statements, BlackRock signaled confidence in Bitcoin (via MicroStrategy) and in robotics/AI innovation (via Sarcos). In turn, those signals have influenced other market participants and the companies themselves (e.g. MicroStrategy’s CEO Michael Saylor welcomed the institutional support). Ultimately, BlackRock’s activity here underscores its role as a bellwether investor – when BlackRock moves into a sector, it tends to validate that sector for the rest of the market – and its investments in “Strategy” and strategy-adjacent firms are no exception.
Sources:
- BlackRock 13G/A filings on MicroStrategy (Strategy Inc.) – share counts and ownership percentages ; historical holdings data .
- CoinDesk – report on BlackRock’s 5% stake disclosure in MicroStrategy (Feb 2025) .
- Stocktwits/Nasdaq News – commentary on BlackRock’s stake and analyst views (KBW note on Bitcoin proxy) .
- Investopedia – overview of MicroStrategy’s Bitcoin strategy and rebranding as “Strategy Inc.” .
- Construction Dive – Sarcos SPAC deal announcement including BlackRock as key investor (April 2021) .
- SEC Proxy Filings – Sarcos 2022 proxy showing BlackRock’s 19.7M share position ; BlackRock 13G on Sarcos (Feb 2023) with 6.6% stake ; BlackRock 13G on Palladyne (Apr 2025) with 10.9% stake .
- Company Press Release – Sarcos rebranding to Palladyne AI focusing on AI software (Mar 2024) .
- MicroStrategy (Strategy) Investor Relations – description of STRC “Stretch” 10.5% preferred and STRK 8% convertible preferred ; press release on STRK offering (Jan 2025) .
- Bloomberg/Business Wire – statements from Sarcos and Rotor executives on the strategic rationale for robotics (2021) .
- Yahoo Finance via Benzinga – market commentary on MicroStrategy’s stock performance and Peter Schiff’s warnings (2025) .