Matt Hougan thinks the burgeoning trend of corporate Bitcoin (BTC) purchases is only beginning.
In a new analysis, the chief investment officer of the crypto asset management firm Bitwise predicts that hundreds of companies will add BTC to their corporate treasuries in the next 12–18 months, which he thinks will cause the Bitcoin market to surge.
Hougan notes the trend is already a lot bigger than MicroStrategy, the largest corporate holder of BTC.
“MicroStrategy gets all the press, but it’s hardly alone. Today, 70 publicly traded companies own Bitcoin on their balance sheets, and many private companies do as well (including Bitwise, by the way).
The public-company list includes well-known crypto companies like Coinbase and Marathon Digital, as well as non-crypto companies like Block, Tesla, Semlar Scientific, and Mercado Libre. Together, these companies—excluding MicroStrategy—own 141,302 BTC.
Private companies aren’t required to report their holdings, but the ones who have done so voluntarily (SpaceX, Block.one, etc.) own at least another 368,043 BTC, according to BitcoinTreasuries.com.
That’s significant. It means that, even today, MicroStrategy is less than 50% of the corporate BTC market. I suspect it’ll be a small fraction of it eventually.”
The Bitwise CIO argues that the reputational risk of buying Bitcoin is diminishing, especially with the incoming Trump Administration’s embrace of crypto.
Hougan also notes that a change in generally accepted accounting principles (GAAP) surrounding Bitcoin will impact the number of companies that choose to invest in the top crypto asset.
“Starting in December, the Financial Accounting Standards Board (FASB) — which governs how publicly traded companies report financials—implemented a new rule called ASU 2023-08 that changes how bitcoin is accounted for in GAAP reporting.
Prior to the start of this year, bitcoin was treated under GAAP as an “intangible asset” subject to “impairment testing.” That meant companies that bought Bitcoin had to mark its value on their books upon purchase and then write down the value if the price fell. But if the price rose, they were not allowed to mark the value back up.
I know that sounds crazy, but it’s true. Under ASU 2023-08, however, that changes. Now, if Bitcoin’s price goes up, companies can mark the value to market and book a profit.”
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