When MicroStrategy Inc. bought $425 million worth of Bitcoin in August and September 2020, the decision became an important stamp of institutional approval for the top cryptocurrency as a mature, safe-haven asset. The American technology firm made Bitcoin its primary reserve asset to hedge against fiat inflation. Now, it appears major global companies are following MicroStrategy’s bitcoin strategy. The website bitcointreasuries.org is curating Bitcoin treasuries held in reserve by publicly traded companies worldwide. At the time of writing, 13 companies with a combined total of 598,237 BTC — representing 2.85% of the total 21 million BTC supply — are listed on the page. Here is a closer look at some of the entities.
Grayscale Bitcoin Trust: Holds 2.14% of Circulating Supply
Grayscale Investments is, perhaps, an unsurprising pacesetter. Through its Bitcoin Trust Fund (GBTC), which owns and tracks the price of bitcoin, the New York-based firm now holds 449,596 BTC, valued at $5.1 billion currently, representing 2.14% of the digital asset’s total circulating supply. Listed on the OTCQX market, the Trust has snapped up 70% of all newly minted bitcoin in 2020, almost doubling its portfolio in the process. It is noteworthy that GBTC holds this BTC on behalf of accredited corporate investors, who typically value privacy and bitcoin’s store-of-value credentials while being calculatively reluctant to gain direct exposure to the asset. Grayscale’s bitcoin trust “became the first publicly quoted securities solely invested in, and deriving value from, the price of bitcoin” when it launched in 2013. The company operates ten crypto investment products focused on institutional investors, covering ethereum (ETH), bitcoin cash (BCH), zcash, XRP, and more.
MicroStrategy Inc.: 0.18% of Supply
Grayscale may be a pioneer, but it is MicroStrategy that grabbed all the headlines in recent weeks. The Nasdaq-listed company, which develops mobile software and provides cloud-based services, bought $425 million worth of bitcoin in August and September, making BTC MicroStrategy’s main reserve asset. The multi-billion-dollar U.S. firm now holds a total 38,250 BTC, in a move that signals increasing corporate adoption. At current exchange rates, the portfolio is worth more than $433 million – a gain of $8 million, coming as it does against a backdrop of increased stimulus spending that has sent global fiat currencies into a tailspin. MicroStrategy CEO Michael Saylor is particularly upbeat: “This investment reflects our belief that bitcoin, as the world’s most widely adopted cryptocurrency, is a dependable store of value and an attractive investment asset with more long-term appreciation potential than holding cash.”
Square Inc.: 0.022% of Supply
Corporate adoption may not be considered a trend just yet, but news that Jack Dorsey’s Square Inc. moved one percent of its total assets into bitcoin suggests something may be building up. On Oct. 8, 2020, the New York Stock Exchange-listed mobile payments firm announced it spent $50 million buying 4,709 BTC. According to Amrita Ahuja, Square’s chief financial officer, “bitcoin has the potential to be a more ubiquitous currency in the future.” On this account, the company intends that “as it grows in adoption, we intend to learn and participate in a disciplined way. For a company that is building products based on a more inclusive future, this investment is a step on that journey.” Bitcoin reacted positively to Square’s news, soaring 8% in 72 hours to more than $11,300 from $10,500. With a market capitalization of over $83 billion, Square provides software and hardware payment solutions. In 2019, the company reported revenue of $4.7 billion.
Coinshares: 0.33% of Supply
Coinshares Ltd is a U.K.-based investment fund focused on direct and indirect exposure to bitcoin and other cryptocurrencies. The company manages over $1 billion in digital assets, with bitcoin making up nearly 80% of this. Coinshares currently holds – on behalf of investors – a total 69,730 BTC, valued at $790 million, according to bitcointreasuries.org. Through its subsidiary XBT Provider, Coinshares offers two globally traded exchange-traded notes (ETNs) in bitcoin and ethereum: Bitcoin Tracker One and BTC Tracker Euro, and Ether Tracker One and ETH Tracker Euro, respectively. Its ETNs are listed on Nasdaq Nordic in Stockholm, Sweden, and retail investors can buy the instruments. However, the product suffered a blow when the U.K. financial regulator banned the sale of ETNs to retail clients in the country recently.
Other Listings
Several other publicly traded companies are listed on the bitcoin treasuries website. They include bitcoin miners Hut 8 Mining, which trades on the Toronto Stock Exchange (TSX), and Argo Blockchain of the London Stock Exchange. Both companies hold bitcoin as a reserve asset. At the end of June 2020, Hut 8 held 2,954 BTC while Argo Blockchain had 126 BTC by the end of September. Another mining entity, Riot Blockchain Inc., had 1,053 BTC in its reserves in June. Mike Novogratz’s Galaxy Digital Holdings, a TSX-listed firm that “seeks to institutionalize the digital asset and blockchain space,” holds 16,651 BTC, worth about $188 million at prevailing market prices. The company provides asset management, investing, advisory and trading services as well as making principal investments. Voyager Digital Ltd, Cypherpunk Holdings, and DigitalX also make the list of those public companies holding bitcoin as a hedge against fiat inflation.
These public disclosures demonstrate that Bitcoin is increasingly seen as a legitimate corporate treasury asset, with a growing number of firms willing to allocate a portion of their balance sheets to the digital asset. While the total holdings represent only a small fraction of Bitcoin’s supply, the trend could accelerate if more companies follow the lead of MicroStrategy and Square, especially in a low-yield, high-inflation economic environment.