Over the past year, I’ve observed a substantial shift in the adoption of Bitcoin (BTC) from individual retail traders towards institutional investors. This transformation is largely due to the growing confidence in the digital asset sector, fostered by the establishment of favorable crypto regulatory frameworks worldwide. Moreover, the emergence of regulated avenues for institutions to engage with cryptocurrencies, such as US-based spot Bitcoin ETFs, has expanded their participation in this industry.
Consequently, Bitcoin has soared to become a $2 trillion digital treasure, with predictions suggesting its growth will continue exponentially, potentially surpassing Gold as a worldwide value depository. Its scarcity and inherent worth have made it increasingly appealing, even to sovereign nations like El Salvador.
Bitcoin Adoption by Public Companies
Previously reported by Coinspeaker, the surge in publicly traded companies adopting Bitcoin can be attributed to MicroStrategy Inc. (NASDAQ: MSTR). This company currently owns approximately 447,470 Bitcoins, valued at over $42 billion. Shareholders of MicroStrategy have reaped substantial benefits from their Bitcoin investment strategy.
Furthermore, the MSTR stock market has significantly surged more than 20 times since adopting the Bitcoin strategy multiple years ago. Notably, several publicly traded Bitcoin mining companies, such as Marathon Digital Holdings, Riot Platforms, and Hut 8 Mining Corp, have all followed suit by incorporating a Bitcoin strategy in their financial plans to counteract inflationary pressures.
Companies spearheaded by Elon Musk, including Tesla Incorporation and SpaceX, have Bitcoin investments in their financial reserves. At the moment, Tesla Incorporation owns approximately 9,720 Bitcoins, which equates to around $914 million in value.
Among the companies investing in Bitcoin (BTC), Coinbase Global Inc. (NASDAQ: COIN) holds approximately 9,480 BTCs, currently valued at around $891 million. Similarly, Galaxy Digital Holdings owns roughly 3,150 BTCs, Bitcoin Group SE manages around 3,589 BTCs, and Block Inc has about 8,363 BTCs in its portfolio.
Naresh Agarwal, a member of the Association of Corporate Treasurers, finds it hard to imagine that directors of public companies would rationalize investing in digital assets due to their responsibility to safeguard funds from risky ventures, as per their fiduciary duties.
Why Now?
The value of Bitcoin has surpassed $2 trillion, primarily due to increased demand from U.S. exchange-traded fund (ETF) issuers. Additionally, these spot Bitcoin ETFs and other investment funds collectively hold approximately 1,289,480 Bitcoins, which is worth over $121 billion.
Approximately 4 million Bitcoins – half still on centralized exchanges for sale and the other half yet to be mined – are attracting interest from publicly traded firms, who are eager to acquire as many coins as they can. To finance these purchases, an increasing number of these companies have decided to issue additional shares, thereby diluting their existing stock.
In simpler terms, the upcoming likely approval of Bitcoin reserves by the U.S. and some states in the coming days has sparked an increase in institutional investors’ interest to purchase Bitcoin, as they expect these approvals.
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2025-01-09 02:18