Adding bitcoin to corporate balance sheets, following MicroStrategy’s lead, is an “overlooked megatrend” that could “lift the entire market”, wrote Bitwise CIO Matt Hougan.
He predicts that over the next 12–18 months “hundreds” of enterprises will buy bitcoin for their reserves. He highlighted three reasons why most investors underestimate the trend.
The MicroStrategy effect is significant
The pioneer of a corporate bitcoin strategy is a small company, ranking 220th globally by market capitalisation. Yet in 2024 MicroStrategy acquired ~257,000 BTC. That exceeds the number of coins mined over the past 12 months.
Michael Saylor’s firm has announced plans to raise $42 billion for further purchases of digital gold. At current prices, that would cover the entire issuance of the cryptocurrency for roughly 2.6 years.
Hougan asked what would happen if a giant like Meta, with a market value roughly 20 times MicroStrategy’s, followed suit.
The trend has already spread beyond MicroStrategy
The business-analytics provider is in the media spotlight, but more than 70 public companies hold bitcoin on their balance sheets, the expert noted.
These include industry players (such as Coinbase and Marathon Digital) and firms from other sectors (Block, Tesla, Semlar Scientific, Mercado Libre and others). Together they hold 141,302 BTC.
Private companies are not required to disclose their assets. However, those that have (such as SpaceX or Block.one) hold at least another 368,043 BTC.
“This means that even today MicroStrategy accounts for less than 50% of the corporate BTC market. I suspect that in the end it will be only a small part of it,” Hougan said.
The number of companies buying bitcoin will grow exponentially
He identified two main factors that have hindered corporate investment in crypto:
- reputational risks;
- accounting rules that negatively affected financial results in the event of asset revaluation.
After the US elections, digital assets have been “accepted at the highest level”. Buying bitcoin has become not just normal but even popular, Hougan believes.
As for the second, more important aspect, since December the Financial Accounting Standards Board has made changes that are favourable to digital assets.
“If 70 companies added bitcoin to their balance sheets when accounting could only reduce its value, imagine how many will buy it now. Two hundred? Five hundred? A thousand?” the executive asked.
Hougan concluded that the reasons corporations decide to buy cryptocurrency do not matter. Investors should properly assess this demand and understand what it implies for the market.
On January 13, Italy’s largest bank Intesa Sanpaolo bought 11 BTC for the first time, and several companies have recently increased their bitcoin reserves or announced plans to build them.