Institutional investors have a growing appetite for Bitcoin.
Several large companies, including Tesla, Square, and Coinbase, have collectively purchased cryptocurrencies worth hundreds of millions of dollars.
For many years, the idea of a listed company buying Bitcoin as its reserve asset has been considered ridiculous. Bitcoin is considered too volatile and too marginal to be accepted by any serious company.
In the past year, driven by the economic situation in the post-epidemic era, this taboo has been completely broken, and some major institutional investors have purchased Bitcoin. When the cloud computing software company MicroStrategy bought $425 million worth of Bitcoin in August and September 2020, the floodgates opened for the first time. Other companies followed closely, including payment processor Square and electric car manufacturer Tesla.
For investors who are unwilling to buy Bitcoin on their own, buying shares of listed companies that hold Bitcoin can be said to be a good way to gain exposure to Bitcoin risk, and saves the trouble of keeping private keys. . In fact, some experts believe that MicroStrategy’s Bitcoin holdings have made the company a veritable Bitcoin ETF.
MicroStrategy is a well-known commercial software company that uses Bitcoin as its main reserve asset.
Throughout 2021, MicroStrategy has never stopped its crazy purchase of Bitcoin. It now holds 105,085 Bitcoins, valued at more than 3.3 billion U.S. dollars. MicroStrategy CEO Michael Saylor is at the helm of this crazy machine.
Unlike other CEOs who are usually shy about discussing his personal investments, Saylor has publicly stated that he personally holds 17,732 bitcoins, which are currently worth more than 565 million US dollars.
According to data from BitInfoCharts, this puts Saylor among the top 100 Bitcoin holders, provided that these Bitcoins are held in one address. For the CEO of MicroStrategy, this was a dramatic flip, as he claimed in 2013 that Bitcoin is running out of time.
On New Year’s Eve in 2020, Morgan Stanley revealed that it has purchased a 10.9% stake in MicroStrategy. And MicroStrategy is also looking for ways to allow other companies to invest in Bitcoin; in February 2021, it held a corporate Bitcoin conference during its World.Now conference, aiming to let companies understand the new cryptocurrency market as soon as possible.
During the meeting, Saylor stated that he expects the number of companies that will convert their balance sheets to Bitcoin in the next year to grow like an “avalanche.”
At Binance Blockchain Week, Saylor explained why he chose Bitcoin instead of gold as a reserve asset. “The return of gold does not look as convincing as Bitcoin. If you want to find an illegal currency derivative value storage tool in an inflationary environment, then you will definitely choose Bitcoin as Crypto gold. This is logical. .”
Electric car manufacturer Tesla has joined the ranks of companies that hold Bitcoin, and a U.S. Securities and Exchange Commission (SEC) document disclosed that the company has invested “a total of 1.5 billion U.S. dollars” in cryptocurrencies. Tesla sold 10% of its Bitcoin holdings in the first quarter of 2021; according to CEO Elon Musk, this is “to verify the liquidity of Bitcoin, instead of holding on the balance sheet.” Have cash”.
Tesla’s 42,902 bitcoins are currently worth 1.37 billion U.S. dollars. According to analysts, the sharp drop in the price of Bitcoin in 2021 means that the company may face impairment losses of 25 million to 100 million U.S. dollars in the next quarter.
According to its filing with the SEC, Tesla’s purchase of Bitcoin reflects a recent investment policy aimed at diversifying the use of cash on hand and maximizing returns. The document states, “We may invest part of this cash in certain alternative reserve assets, including Crypto assets, gold bars, gold exchange-traded funds and other assets designated in the future.”
The company’s Bitcoin game was played after months of speculation, as CEO Elon Musk discussed cryptocurrencies on Twitter. At the end of 2020, MicroStrategy’s Saylor proposed to share his Bitcoin investment “play” with Musk. Previously, he believed that entering the Bitcoin market would bring Tesla shareholders “100 billion US dollars in income.”
Soon thereafter, at the end of January 2021, Musk added #Bitcoin to his Twitter resume; looking back, it seems to imply that Tesla will enter the cryptocurrency market.
However, Musk’s relationship with Bitcoin is not entirely positive. In March 2021, Musk announced that Tesla would accept Bitcoin as a payment channel. Only two months later, he suddenly announced that the company would no longer accept cryptocurrency payments.
Musk shut down cryptocurrency payment channels on the grounds that the use of fossil fuels in bitcoin mining and transactions is increasing rapidly. But he also hinted that the company will not sell any of its Bitcoin holdings, and that once Bitcoin mining “transitions to more sustainable energy”, it will consider using Bitcoin again for transactions. He later clarified that as long as miners use more than 50% of clean energy, the company will resume using Bitcoin for transactions.
3.Galaxy Digital Holdings
According to bitcointreasuries.org data, a commercial bank focused on the cryptocurrency market and directly involved in the cryptocurrency industry’s largest bitcoin institution holder-Galaxy Digital Holdings holds 16,400 bitcoins, valued at approximately 522 million U.S. dollars.
The company was founded by Michael Novogratz in January 2018 and works with cryptocurrency companies including Block.one and BlockFi. Michael Novogratz has always been an active advocate of Bitcoin. In April 2020, he pointed out that the stimulus measures announced in response to the epidemic are driving people’s interest in cryptocurrency, calling this a “moment” for Bitcoin, and that “money does not grow on a tree”.
However, later this year, Michael Novogratz believes that the volatility of cryptocurrencies means that gold is a safer bet. He said: “I think Bitcoin performs far better than gold, but I would not advise people like holding There is a large holding of Bitcoin like gold. It’s just because of volatility.”
4.Voyager Digital LTD
According to bitcointreasuries.org, cryptocurrency broker Voyager Digital holds a total of 12,260 bitcoins, which are worth approximately US$390 million at current prices. The company aims to provide a one-stop service for Crypto asset transactions, and reported quarterly revenue of US$60.4 million in May 2021, a 16-fold increase from the previous quarter. CEO Steven Ehrlich said at the earnings conference, “We have seen the large-scale adoption of cryptocurrencies as a recognized and investable asset class.”
In a document submitted to Canadian regulators in June 2021, the company’s tone was more cautious, stating that “the sharp drop in the price of Bitcoin may have a significant adverse impact on the company’s operating results due to the market uncertainty surrounding the epidemic. , The price of Bitcoin “dropped sharply” in March 2020.”
Square invested $50 million in Bitcoin in October 2020, igniting institutional interest in investing in cryptocurrencies.
Since then, the payment company continued to invest in Bitcoin, and revealed in its fourth quarter 2020 financial report that it had bought another $170 million worth of Bitcoin. Considering that CEO Jack Dorsey is Bitcoin’s dead long (he even runs his own Bitcoin node), this may not be surprising.
At the time, the company described this investment as “part of Square’s ongoing commitment to Bitcoin” and pointed out that “the company plans to evaluate the relationship between its total investment in Bitcoin and other investments on an ongoing basis.
At present, it holds 8,207 Bitcoins, valued at 255 million U.S. dollars at current prices. Square has not changed its views on Bitcoin. In March 2021, Square Chief Financial Officer Amrita Ahuja said in an interview with Fortune that “Bitcoin should be on every balance sheet, which is absolutely reasonable” and reiterated the company’s commitment to “long-term” Hold crypto assets.
Square has also made further efforts to establish the Bitcoin ecosystem, launched a $5 million fund to promote cryptocurrency education, and published a white paper to defend the environmentally friendly nature of cryptocurrency.
In July 2021, the company announced plans to develop a Bitcoin hardware wallet; perhaps eventually it will transfer its holdings of Bitcoin to its own products.
6.Marathon Digital Holdings Inc.
Bitcoin mining company Marathon Digital Holdings. has 5,784 Bitcoins in its asset library (valued at approximately US$184 million at current prices). The company’s goal is to build “the largest bitcoin mining business in North America, and one of the lowest energy costs.” Before turning to cryptocurrency mining, it was a patent holding company (and often referred to as a patent giant).
The company’s performance this year is good, starting with a capital raising of US$200 million in 2021. In the past year, driven by the outflow of Chinese cryptocurrency miners, its stock price has soared by more than 3000% (in fact, its performance so far has far surpassed Bitcoin).
Marathon Digital’s ultimate goal is to have more than 103,000 mining machines and produce 50-60 bitcoins per day; as of June 2021, it produces 265.6 bitcoins per month, so it still has a way to go. But as the company delivered another 18,000 ASIC mining machines in June, and 1,000 more are on the road, it seems to be on track.
7.Coinbase Global, Inc.
It can be said to be the most well-known cryptocurrency company in this list. The cryptocurrency exchange Coinbase was listed directly on the Nasdaq in April 2021.
This move was hailed as a milestone in the cryptocurrency industry, despite the subsequent decline in Coinbase’s share price; by July 2021, COIN was a full one-third lower than its listing price.
Prior to listing, in February 2021, Coinbase disclosed that it held USD 230 million in Bitcoin on its balance sheet; by July 2021, its Bitcoin holdings had fallen to USD 143 million (approximately 4482 Bitcoins) .
8.Bitcoin Group SE
The German-based venture capital firm Bitcoin Group SE holds 3947 bitcoins, valued at approximately US$126 million. Its investment projects, the cryptocurrency exchange Bitcoin.de and Futurum Bank, merged into “Germany’s first cryptocurrency bank” in October 2020.
This move follows the German Parliament’s decision to allow banks to sell and store cryptocurrencies. Marco Bodewein, general manager of Bitcoin Group SE, emphasized that there is an opportunity to introduce the “high returns and security features” of cryptocurrencies to institutional investors in banks.
9.Hut 8 Mining Corp
According to bitcointreasuries.org data, Canadian cryptocurrency mining company Hut 8 holds 3,522 bitcoins, valued at US$112 million. In June 2021, the company was listed on the Nasdaq Global Select Market under the ticker symbol HUT. The company’s filing with the US Securities and Exchange Commission stated that it was “committed to creating more for shareholders through increased Bitcoin holdings. income”.
The company also explained that it generates stable income by leveraging its own bitcoin assets that it mines and holds.
In June 2021, Hut 8 stated that the company would mine 5,000 bitcoins before the end of the year; as the company snapped up new mining machines and the difficulty of mining bitcoin recently decreased, the company’s mining business was booming. The company is optimistic that a “favorable geopolitical environment” will promote the development of its mining business in 2021.
10.Riot Blockchain, Inc.
Another cryptocurrency mining company, Riot Blockchain, headquartered in the United States, holds relatively few bitcoins, only 2,243, worth about $71 million.
With its valuation soaring from less than US$200 million in 2020 to a high of more than US$6 billion in 2021, the Nasdaq-listed company has been actively expanding recently. In April 2021, it spent $650 million to build a gigawatt Bitcoin mine in Rockdale, Texas; the company described this expansion as a “transformative event”, and he will become “The largest Bitcoin mining and custody public company in North America by total production capacity.”
Nevertheless, the persistently sluggish Bitcoin price has wiped out nearly 3/4 of Riot’s stock price. When the Rockdale mine was built, its transaction price was 48 US dollars per share, and it peaked at nearly 80 US dollars. Now it has fallen to less than 28 US dollars per share.