Bitcoins
- While MicroStrategy dominates headlines, there are already 70 public companies holding Bitcoin on their balance sheets, with private entities controlling an additional 368,043 BTC according to Bitwise CIO Matt Hougan.
- Recent changes to US GAAP accounting rules now allow companies to record Bitcoin price increases as profit instead of only recording losses, removing a major obstacle to corporate adoption.
- The Bitwise CIO predicts hundreds of companies will add Bitcoin to their treasuries in the next 12-18 months due to reduced reputational risk and improved accounting standards, which could significantly impact the market.
MicroStrategy. There, just one word and I got your attention. No, this is not about Michael Saylor’s company buying more Bitcoin, although it did that too, like clockwork.
No, this is about how, despite being all over the news, their Bitcoin buying strategy is one of the most under-the-radar things right now.
Related: Report: Donald Trump to Issue Crypto Executive Order on Day One Back in Office
Sure, over in Japan, Metaplanet is following a similar strategy, and Semler Scientific just increased their Bitcoin holdings to 2,321 BTC.
More Companies Are Buying Bitcoin
So, while most only think of MicroStrategy (MSTR) when they think about a company buying Bitcoin, there are more institutional buyers than most are aware of.
According to Matt Hougan, the Chief Investment Officer at Bitwise (which also holds the asset on their books) it’s an overlooked trend and one he predicts will see acceleration in 2025.
We’ll see hundreds of companies buy bitcoin for their treasuries over the next 12-18 months, and their purchases will lift the entire bitcoin market substantially higher.
Matt Hougan
There are three reasons according to Hougan why; first, MSTR is bigger than you’d expect, second, the trend is already bigger than MSTR, and last, the number of companies buying BTC is set to “explode”.
MicroStrategy bought more than the entire 2024 supply. That’s right, they bought more BTC than was mined all year.
Hougan compares Saylor’s firm to Chipotle, which is of similar size, and while by no means a small company, the CIO says once a “really big” company starts buying, that’s when things are starting to get interesting.
Many MORE Companies Could Buy Bitcoin
He also points out that while MSTR gets all the attention, there are already “70 publicly traded companies [which] own bitcoin on their balance sheets”, and many private ones potentially as well – though we can’t say for sure as they don’t need to disclose that.
The public-company list includes well-known crypto companies like Coinbase and Marathon Digital, as well as non-crypto companies like Block, Tesla, Semlar [sic] Scientific, and Mercado Libre. Together, these companies—excluding MicroStrategy—own 141,302 BTC.
Matt Hougan
And Hougan says there are “at least another 368,043 BTC” owned by private entities.
He has identified two reasons why those numbers are only going to increase: Reputational risk and accounting standards.
In the past, adding Bitcoin to a corporate balance sheet was difficult and often frowned upon. Of course, the election of Trump has changed all that, and crypto is now discussed at the “highest levels” in the US (and elsewhere, too).
This alone should cause the number of companies buying bitcoin to double.
Matt Hougan
“Ask Yourself Two Questions”
The other, much more significant reason, is that under US GAAP accounting rules Bitcoin was treated as an intangible asset and as such only a decrease in price could be recorded on the financial accounts, whereas a price increase had to be ignored.
However, under new rules which came into effect recently, this changed, and if BTC price goes up, “companies can mark the value to market and book a profit”.
Related: Court Orders “Evasive” SEC to Explain Itself In A Legal Victory For Coinbase
Hougan says that this should see many more companies opting to invest in Bitcoin, as it removes a huge obstacle.
If 70 companies were willing to add bitcoin to their balance sheets when, from an accounting perspective, it literally could only go down, imagine how many will add it to their balance sheet now. Two hundred? Five hundred? A thousand?
Matt Hougan
So, why would all these companies buy Bitcoin anyway? Although many may be greedy, some are worried about the value of the dollar and some just want to show they get Bitcoin, Hougan says in the end it’s simple:
As an investor, you don’t have to know why every company buys bitcoin any more than you need to know why every institution, financial advisor, and retail investor does. You just need to look at the numbers and ask yourself two questions: Where does all of this demand from companies look like it’s going? And what would that mean for the market?
Matt Hougan
Aaron Feuerstein Read More