A number of companies have started to consider the idea of holding Bitcoin on their balance sheets for a variety of reasons. Some have cited inflation as their reason. Others have found it to be an asset that remains liquid while also generating a return. And some just want to support Bitcoin and its ability to give economic empowerment to individuals.
- The list of companies adopting Bitcoin as a reserve asset has grown in the last year.
- Companies have made this decision due to inflation and low-interest rates, making cash held on balance sheets lose value over time.
- Some of the larger companies that hold Bitcoin include Tesla (TSLA) and Square (SQ).
Perhaps the biggest Bitcoin bull of them all is MicroStrategy (MSTR) and its CEO, Michael Saylor. Saylor has been extremely vocal about Bitcoin on his Twitter account. The business intelligence company even has a whole section of its website dedicated to Bitcoin.
In early August of 2020, MicroStrategy purchased its first Bitcoin for $250 million. Since then, the company has continued to acquire more and more of the digital asset in varying quantities.
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The goal behind the company's purchase is to maximize long-term value for its shareholders.
“Our investment in Bitcoin is part of our new capital allocation strategy, which seeks to maximize long-term value for our shareholders,” said Michael J. Saylor, CEO, MicroStrategy Incorporated. “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."
Most recently, MicroStrategy announced that it purchased an additional $242.9 million worth of Bitcoin at an average price of $48,099. The company has now spent $3.16 billion on Bitcoin at an average purchase price of $27,713.
In late December of 2020, Tesla (TSLA) announced that it had updated its investment policy to provide the company with more flexibility and diversity, allowing them to invest in digital assets like Bitcoin.
After its policy change, the company invested $1.5 billion into Bitcoin and said it might acquire more and hold the asset from time to time or even long-term. Elon Musk has also been highly vocal and positive about cryptocurrencies on his Twitter account.
Tesla's Q1 2021 earnings report revealed that the company had actually sold 10% of its Bitcoin holdings, creating a stir on social media with some saying the company helped to pump Bitcoin only to sell some.
While Tesla did sell some of its Bitcoin, its reasoning for the move looks to have been as a test of the cryptocurrency's liquidity. The company still holds over 43,000 Bitcoin.
Elon Musk has recently confirmed that SpaceX also holds Bitcoin and that as Bitcoin mining becomes greener Tesla will likely begin accepting Bitcoin as payment again.
In October of 2020, Square (SQ) announced that it would purchase $50 million worth of Bitcoin worth approximately 4,709 Bitcoins at the time of purchase. This means that the price spent per Bitcoin was just over $10,600 when they made the investment in October. Square later purchased an additional 3,318 Bitcoin in February 2021.
Square has been involved in the cryptocurrency space since 2018 when it began allowing users of CashApp to buy, sell and hold Bitcoin and other cryptos. Square's founder and also the creator of Twitter, Jack Dorsey, is also a known Bitcoiner. Dorsey made a move to create Square Crypto, an independent team that contributes to Bitcoin's open-source code to further the protocol.
Square furthered its commitment to Bitcoin by creating the Cryptocurrency Open Patent Alliance, a non-profit that seeks to push crypto innovation and help to maintain open access to crypto-related inventions and software.
The announcement said that the company believes Bitcoin to be a tool of individual empowerment that can benefit the greater good.
"We view bitcoin as an instrument of global economic empowerment; it is a way for individuals around the world to participate in a global monetary system and secure their own financial future. This investment is an important step in furthering our mission."
Marathon Digital Holdings
Marathon Digital Holdings (MARA) is a Bitcoin mining company. Over time the company has slowly amassed a portfolio of over 5,000 Bitcoin. The company's site says that it aims to build the largest mining operation in North America at one of the lowest energy costs.
According to its website, the company produces just over 55 Bitcoin a day with its over 103,000 miners and makes up 6.2% of Bitcoin's global hash rate. The cost of running its operation is nearly $5,000 a day.
The company also bought $150 million worth of Bitcoin in January to better its long-term investment strategy.
“We…believe that holding part of our treasury reserves in bitcoin will be a better long-term strategy than holding US dollars, similar to other forward-thinking companies like Microstrategy,” said Marathon's CEO, Merrick Okamoto.
One of the largest cryptocurrency exchanges in the world and the first to go public in the United States, Coinbase (COIN) represents a new level of maturity for the asset class and its surrounding industry.
Coinbase's public listing occurred on April 14th of this year. In the process of becoming public, the company's cryptocurrency holdings were made public. Coinbase currently holds 4,487 Bitcoin, which confused many, as it is the most prominent crypto exchange in the US, yet it holds less than non-crypto-related companies on this list.
The Coinbase website boasts 56 million verified users, $335 million in quarterly trade volume and $223 billion of assets on the platform. The company has made no public statements on whether they will continue to hold Bitcoin or buy more in the future.