Matt Hougan, Chief Investment Officer (CIO) of Bitwise, sees a remarkable development within the business world: more and more companies are adding Bitcoin to their cash reserves. He calls this a “megatrend” that he believes is often overlooked, but could significantly strengthen the Bitcoin market.
The MicroStrategy Effect
An important example of this trend is MicroStrategy, Michael Saylor’s company. Despite a 10% decline in revenue through 2024, MicroStrategy remains one of the best performing stocks in the Nasdaq 100. This is mainly due to the company’s enormous Bitcoin reserve.
MicroStrategy currently owns 450,000 BTC, worth almost $45 billion. This represents 2.12% of the total Bitcoin supply of 21 million. In 2024 alone, the company purchased 257,000 BTC, more than the entire new Bitcoin supply of the past year.
According to Bitcointreasuries.com, 46 publicly traded companies together own 591,539 BTC, worth almost $60 billion. In addition, at least twelve private companies collectively own 368,043 BTC, worth approximately $37 billion.
Hougan emphasizes that this trend is not limited to MicroStrategy:
“Over the next 12-18 months we will see hundreds of companies buying Bitcoin for their cash reserves. These purchases will give the entire Bitcoin market a huge boost.”
Changing regulations and market acceptance
One of the reasons why companies are now more likely to add Bitcoin to their balance sheets is improved regulation and market acceptance. The approval of Bitcoin spot ETFs in January 2024 played a key role in this. Former President Donald Trump’s strong support for crypto has also brought Bitcoin further into the mainstream.
Hougan explains how Bitcoin’s reputation has improved:
“Last year, CEOs of publicly traded companies risked negative media attention, lawsuits and regulatory interference if they added Bitcoin to their balance sheets. But reputational risks have reduced significantly in recent months.”
New accounting standard as a catalyst
The introduction of a new accounting standard, ASU 2023-08, has further improved the situation. This standard allows companies to report both increases and decreases in the value of their Bitcoin holdings. Previously, only losses could be reported, which deterred companies.
Hougan predicts a significant increase in the number of companies that will buy Bitcoin:
“If 70 companies already added Bitcoin when only depreciation was allowed, imagine what could happen now. Two hundred? Five hundred? Maybe a thousand?”
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Source: https://newsbit.nl/bitwise-cio-voorspelt-explosieve-groei-honderden-bedrijven-zetten-in-op-bitcoin/
