Bitcoin (BTC) Adoption by Public Companies has Shifted from Retail Traders to Institutional Investors

The adoption of Bitcoin (BTC) has significantly shifted from retail traders to institutional investors in the past year.

output: Key Notes

Bitcoin (BTC) price has rallied 24% in the past 30 days, reaching a high of $94,832 on Wednesday. The BTC price has also surged over 400% from a low of about $18,000 in December 2020. As the world’s largest cryptocurrency continues to rally to new all-time highs, several publicly traded companies are pivoting to include Bitcoin in their balance sheets.

This article analyzes the publicly traded companies that are adopting Bitcoin and the reasons behind their decision.

Public Companies Pivoting to Include Bitcoin in Their Balance Sheets

As previously reported by Coinspeaker, the adoption of Bitcoin by publicly traded companies was catalyzed by MicroStrategy (NASDAQ: MSTR). The company began allocating a large portion of its balance sheet to the world’s largest cryptocurrency in August 2020. MicroStrategy currently holds about 447,470 Bitcoins, valued at over $42 billion, at the time of this report.

MicroStrategy shareholders have also benefited from the company’s BTC strategy, as MSTR stock has rallied over 20x since the adoption of Bitcoin several years ago. Several publicly traded BTC mining companies – led by Marathon Digital Holdings (NASDAQ: MARA), Riot Platforms (NASDAQ: RIOT), and Hut 8 Mining (NASDAQ: HUT) – also adopted a BTC strategy in their respective balance sheets to hedge against inflation.

Furthermore, Elon Musk-backed companies such as Tesla (NASDAQ: TSLA) and SpaceX also hold Bitcoin in their balance sheets. As of this writing, Tesla held about 9,720 Bitcoins, valued at about $914 million.

Other publicly traded companies that have allocated a portion of their balance sheets to the world’s largest cryptocurrency include Coinbase (NASDAQ: COIN), Galaxy Digital (NYSE: GLXY), Bitcoin Group (NYSE: BTCC), and Block (NYSE: SQ). Coinbase Global has a total of 9,480 BTCs, valued at about $891 million. Others include Galaxy Digital with about 3,150 BTCs, Bitcoin Group SE with a balance of about 3,589 BTC, and Block Inc with a balance of about 8,363 BTC.

According to Naresh Agarwal, an associate director at the Association of Corporate Treasurers, “it does now seem conceivable that board members of publicly traded companies could justify investments in digital assets, given their fiduciary duty to protect funds from high-risk investments.”

Why Are Publicly Traded Companies Buying Bitcoin?

Bitcoin has grown to a valuation of over $2 trillion, bolstered by the higher demand from the US spot BTC ETF issuers. Moreover, spot Bitcoin ETFs and other investment funds have accumulated around 1,289,480 BTCs, valued at over $121 billion.

With around 2 million Bitcoins remaining on centralized exchanges for sale and about 2 million to be mined, publicly traded companies are keen to accumulate as many coins as possible. Consequently, more publicly traded companies have opted to dilute their shares more to raise funds and purchase more Bitcoins.

The expected approval of strategic Bitcoin reserves by the United States and several states in the near term will also increase the demand for BTC by institutional investors.