Software company MicroStrategy (MSTR) recently increased its Bitcoin (BTC) holdings by about a quarter of a billion dollars, bringing its total Bitcoin holdings to about $5.1 billion.
The latest purchase of 5,050 coins at an average price of $48,099 is in line with CEO Michael Saylor’s twin corporate strategy: developing software business and using excess cash for Bitcoin purchases. The software firm, which first bought Bitcoin in August 2020, is now the biggest corporate investor in cryptocurrency.
Saylor, who expects Bitcoin to outpace all other asset classes, tweeted last week that his company avoided a “multi-billion dollar mistake” by investing in Bitcoin. And Bitcoin maximalist Saylor’s strategy of adding the de-facto crypto leader to the balance sheet has so far paid off.
In a statement filed with the Securities and Exchange Commission, MicroStrategy said the company now holds 114,042 Bitcoins, which was bought for $3.16 billion at an average price of around $27,713. Based on the current market price, these coins are now worth about $5.1 billion.
“Our strategy is long #bitcoin, long term, leveraged intelligently,” he tweeted last month. “It is only a matter of time before billions of people plug their mobile phones into bitcoin and we want to be there first. The future of big tech is digital property.”
Diversifying cash for Bitcoin
Forward-thinking corporations from car marker Tesla to payment firm Square have been swapping billions of dollars worth of cash on their balance sheet for Bitcoin.
According to Bitcoin Treasuries, companies own 1.66 million Bitcoin or nearly 8% of supply. The crypto leader’s supply is limited to a total of 21 million BTC.
Corporations are substituting cash for Bitcoin for several reasons. Bitcoin’s price appreciation has been a major factor behind this strategy when compared to fiat currencies. Second, corporations want to protect their money from rising inflation and currency devaluations.
On top of these two reasons, a low-interest-rate environment and a struggling bond market have pushed corporations and investors towards alternative asset classes.
“Global macroeconomic, monetary, and digital evolutions have converged, requiring all forward-thinking corporations to consider alternative assets on their balance sheet,” said MicroStrategy President and CFO Phong Le.
“The ecosystem and the regulatory environment for digital assets, especially bitcoin, have matured to the point that this strategy is becoming approachable and mainstream,” Le added.
Who holds the most Bitcoin on their balance sheets?
Besides MicroStrategy, here are the top corporate Bitcoin buyers.
Tesla
After MicroStrategy, Elon Musk’s Tesla is the second-largest holder of the crypto leader. Musk’s electric car company initially bought $1.5 billion worth of Bitcoin early this year. The second richest person in the world with a net worth of $162.7 billion recently revealed that outside of Tesla and SpaceX stock, Bitcoin is his largest holding. He also personally owns Ethereum and Dogecoin.
Galaxy Digital Holdings
Michael Novogratz’s crypto-focused merchant bank Galaxy Digital Holdings holds 16,400 BTC, according to Bitcoin treasuries.
Novogratz, who expects the Bitcoin price to increase substantially in the years ahead, has also been investing heavily in other crypto projects. According to the second-quarter results, his company has deployed over $52 million of capital into 14 NFT-related companies.
Voyager Digital
Crypto brokerage Voyager Digital owns 12,260 BTC coins, according to bitcoinworldwide.com. Early this year, Voyager CEO Steve Ehrlich predicted that crypto would go mainstream this year.
“We will see institutions, corporations, and public companies rush to hedge their cash reserves into Bitcoin with more velocity,” Steve Ehrlich predicted.
Voyager Digital, which aims to provide a one-stop-shop for trading digital assets, generated 65% revenue growth in the June quarter from the March quarter.
Square
Payment firm Square, which generates billions of dollars in Bitcoin revenue, owns about 8,027 BTC. Square first purchased $50 million worth of Bitcoin last year and scooped up another $170 million worth of coins early this year. CEO Jack Dorsey predicts that Bitcoin will eventually become the “single currency” of the internet.
Marathon Digital and Coinbase are also among the biggest corporate Bitcoin holders with 6,226 BTC and 4,487 BTC, respectively.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
