Matt Hougan has been appointed Chief Investment Officer at Bitwise. bold predictionOver the next 12-18 months, hundreds of companies are expected to buy Bitcoins as a Treasury Asset. Hougan calls the shift an “overlooked megatrend,” Bitcoin’s future market direction could be affected significantly by the new technology.
MicroStrategy – The Torchbearer in Corporate Bitcoin Adoption
Michael Saylor is the leader of MicroStrategy. The company has been synonymous with Bitcoin adoption in corporate environments. The company is only ranked 220th in the world by its market capitalization but has a disproportionate influence on the Bitcoin markets. In 2024 alone, MicroStrategy acquired 257,000 BTC—exceeding the total Bitcoin mined that year (218,829 BTC).
Its ambitious plans show no sign of slowing down. Recently, the company announced plans to spend $42 billion on additional Bitcoin purchases. This is equal to about 2.6 year’s worth of Bitcoin at present rates.
The Growing Power of MicroStrategy
MicroStrategy is only scratching the surface of what it can do. Hougan says that more than 70 public companies hold Bitcoins on their balance sheets. This list does not include only cryptocurrency-native businesses like Coinbase or Marathon Digital. It also includes mainstream giants such as Tesla, Block, Mercado Libre, Block and Block. Together, these firms—excluding MicroStrategy—own 141,302 BTC.
The private sector is also a major player. SpaceX, Block.one, and others collectively hold at least 368,043 BTC, based on data from BitcoinTreasuries.com. Hougan points out that MicroStrategy’s share of corporate Bitcoin is less than half and will likely continue to decrease as adoption increases.
What happens when larger companies, like Meta, which is currently considering a shareholder suggestion to add bitcoin to its balance sheet—20x the size of MicroStrategy start to emulate MicroStrategy’s strategy?
The adoption of Bitcoin by corporations is likely to accelerate
Over the years, two main barriers to corporate adoption have been reputational risk and infringing accounting regulations. The two have taken a dramatic turn in the last few months.
1. Reduced reputational risk
Up until recently, adopting Bitcoin was a difficult task for companies. Boards of directors and CEOs were worried about lawsuits from shareholders, negative media coverage, and regulatory scrutiny. As Bitcoin becomes more accepted at the institutional and government levels, fears of a backlash are fading. Bitcoin’s popularity in Washington has grown since the last election, with bipartisan backing. “commonplace—and even popular—to own Bitcoin,” According to Hougan.
2. Favorable Accounting Changes
Financial Accounting Standards Board, FASB, has introduced ASU-2023-08 which fundamentally alters the accounting for Bitcoin. Before, businesses were required to label Bitcoin an intangible, which forced them to devalue it during price drops, while preventing any upward adjustments.
Bitcoins can be valued at market value under the new rule. This allows companies to realize profits when Bitcoin’s price increases. This new change will remove a major disincentive to corporate Bitcoin ownership.
It is important to note that the word “you” means anyone. “Why” Why Corporate Bitcoin Adoption?
The motivations of corporate investors to hold Bitcoin are similar to those of individuals. Hougan gives several reasons.
- Hedging against InflationThe Bitcoin currency is seen as an effective safeguard against currency debasement.
- It is a speculative activitySeveral companies want to raise the stock price by using Bitcoin.
- Signs of Cultural DiversityThe possession of Bitcoin is a sign that you are innovative and will attract a younger tech-savvy clientele.
- Strategic HunchesBitcoin ownership can be a risky business for some.
Hougan claims that corporate adoption is less important than the demand. “You just need to look at the numbers,” He writes. “Where does all this demand look like it’s going? And what would that mean for the market?”
Markets Could be redefined in the face of a Megatrend
Hougan’s memo presents a positive picture for Bitcoin’s prospects. If MicroStrategy is followed by hundreds of other companies, then the demand will be significant in driving Bitcoins’ price higher. It is possible that adoption will explode, as 70 companies have already signed up under less favorable circumstances.
This trend shows that Bitcoin is not only evolving as a treasury instrument, but its increasing acceptance in the financial mainstream. The implications for mature investors are obvious: Bitcoin could be at a turning point in its journey, from being a speculative investment to establishing itself as a cornerstone of the financial industry.
Purchase Now!
Bitcoin’s inclusion in corporate Treasury is unavoidable. Accounting rules are evolving and demand has accelerated. Hougan invites investors and analysts to think about the implications of his analysis:
What would it mean for the Bitcoin market if large corporations adopted Bitcoin? Investors who are savvy may want to act sooner than later.
This is not financial advice. It’s just for your information. Do your research prior to making investment decisions.
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Source: bitcoinmagazine.com
