Compass Investments

– Bitcoin falls, MSTR stock sags – why is the $284 billion New York City pension fund buying despite seven percent drop?

Bitcoin continued its decline this week, pulling closely related stocks down with it, causing Strategy (MSTR) to plummet during regular trading sessions.

However, even as the stock crashed more than 7% in a single day, one of the largest U.S. public pension funds was quietly building up its stake.

The New York State Common Retirement Fund, which manages about $284 billion, increased its position in Strategy, a Nasdaq-listed company that many see as a proxy for bitcoin.

Strategy shares were down to $163.55 by 1:56 p.m. East Coast time on Dec. 15, showing a daily decline of 7.29% . Trading was brisk, with nearly 14 million securities changing hands for a total of $2.32 billion.

Quotes fluctuated between an intraday high of $176.50 and a low of $160.54, bringing the company’s market capitalization to $50.7 billion.

Strategy currently has 287.35 million shares outstanding, of which 267.03 million are publicly traded, and a basic net asset value (mNAV) of 0.88.

The decline reflects the intensification of the downtrend in the broader cryptocurrency market. Bitcoin traded near $86,214, having lost 3.5% in the past 24 hours, 4.4% in the past week and over 10% in the past month.

The correction came after a significant retreat from bitcoin’s recent peak of over $126,000, which put severe pressure on companies directly dependent on the exchange rate of the asset.

the New York State Foundation increased its stake as early as the second quarter of fiscal 2025 and recorded an additional increase in its November third-quarter filing.

As of that date, the fund held approximately 0.10% of Strategy’s shares worth approximately $113.8 million.

The New York State Retirement Fund is one of the largest public pension systems in the country, whose portfolio consists primarily of U.S. equities, debt instruments, private equity, real assets and other investments, with equities representing slightly more than 40% of total assets.

It holds large stakes in leading U.S. corporations in the technology, financials, consumer staples and healthcare sectors.

Strategy remains a small part of this diversified portfolio, but its resilience is noteworthy given the inherent volatility of bitcoin-related assets.

Strategy has been the most visible example of this impact. The company has been converting its operating cash flow, equity issuance and debt financing into bitcoin purchases over the past few years.

This approach has resulted in the company’s stock functioning as a leveraged instrument, replicating the fluctuations in the bitcoin price.