Why Corporate Giants Are Eyeing Bitcoin for Their Investments
The financial landscape is undergoing a profound shift as once-sceptical cryptocurrencies become increasingly popular with institutions. The paradigm shift in investment strategies and financial services reflects a broader recognition that digital assets are reshaping the global economy.
Bitcoin ETFs are gaining prominence
On January 10, when the U.S. Securities and Exchange Commission (SEC) approved a spot Bitcoin ETF, the institutional attitude and legal classification of Bitcoin changed dramatically. Bitcoin ETFs quickly gained traction among institutional and retail investors earlier this year. There are currently 36 different ETFs trading in the U.S. market, with total assets now exceeding $61 billion. Only the gold ETF has a larger total asset size than the Bitcoin ETF.
The status of Bitcoin ETFs was further strengthened on September 20 when the SEC approved asset management firm BlackRock’s spot Bitcoin ETF for listing and options trading on Nasdaq. BlackRock’s spot Bitcoin ETF has become one of the fastest-growing ETFs ever, now holding nearly $23 billion in assets.
BlackRock CEO Larry Fink, a former Bitcoin critic who now believes he was “wrong” about Bitcoin, now believes Bitcoin is “digital gold” and “legitimate” financial instruments.
Bitcoin surges after election
Market analysts expect Bitcoin price to cross the $100,000 mark before the end of November, as it surpassed an all-time high of $90,000 on November 13, just over a week after Trump won the US presidential election time.
Notably, the total market capitalization of crypto assets is currently around $3.1 trillion, driven by expectations of new government pro-cryptocurrency policies. Trump’s pro-Bitcoin stance further encourages institutional investment in anticipation of regulatory changes that could benefit them. Trump noted that nearly 30-40% of Americans already hold cryptocurrencies, suggesting a favorable government stance could spur more demand.
The recent U.S. Commodity Futures Trading Commission (CFTC) approval of U.S. Bitcoin ETF options trading has further fueled market interest. This marks an important milestone for the cryptocurrency, especially as institutional interest in BTC continues to grow.
Notably, CFTC approval may also provide Wall Street players with greater exposure to investment vehicles, which could significantly boost Bitcoin prices in the coming days.
Why is Bitcoin good for Wall Street giants?
In a notable shift, a growing number of Wall Street billionaires are abandoning traditional government bonds and turning to Bitcoin (BTC) as a hedge against inflation. According to Forbes, high-profile investors including BlackRock CEO Larry Fink expressed concern about Bitcoin’s potential to protect their portfolios amid escalating concerns about U.S. monetary policy and the national debt. Growing confidence.
Over the past decade, Bitcoin has experienced a huge surge, gaining 22,208%, while the U.S. dollar has lost 33% of its value. The figures highlight the stark contrast between Bitcoin’s performance and the decline in the value of fiat currencies, reinforcing its appeal as a long-term investment vehicle.
Bitcoin’s supply is capped at 21 million coins, ensuring its scarcity and making it inherently resistant to inflation. This feature is particularly attractive to investors looking for assets that can retain or appreciate in value over time, unlike fiat currencies, which can be printed in unlimited quantities.
Microstrategy’s Bitcoin Playbook
Microstrategy, led by Michael Saylor, holds more Bitcoin than any other publicly traded company. Microstrategy has purchased 279,420 BTC, which is approximately 1.33% of the total supply. Microstrategy uses a unique strategy where they raise debt capital and use it to purchase Bitcoin. The theory behind this strategy is that the company can repay its fiat debt by selling fewer Bitcoins in the future. Other companies are starting to copy this strategy.
MicroStrategy’s next step is “Project 21/21,” which plans to raise $42 billion and then use it to buy more Bitcoin. MicroStrategy already has 252,200 Bitcoins on its balance sheet, worth more than $21 billion at today’s prices. Therefore, the plan is to double the company’s current Bitcoin holdings. It is already the largest Bitcoin holder in the world and currently holds more Bitcoins than either the U.S. or Chinese governments.
Is the company following suit?
Japanese company Metaplanet has been following in the footsteps of MicroStrategy with its Bitcoin acquisition strategy. This has led to a surge in Bitcoin yields, leading to its valuation nearly doubling since the start of the year. After adding Bitcoin to its vaults back in September 2020, MSTR shares rose by 2,200%.
It began acquiring Bitcoin as a treasury asset in May to cope with the challenges posed by the depreciation of the yen and low interest rates and high national debt. As of the end of October, Metaplanet’s Bitcoin holdings quickly increased to 1,018.17 BTC, with a total investment of nearly $64 million.
Most recently this week, the company reported that its Bitcoin holdings had increased in value by $28 million due to continued investment in the cryptocurrency. Metaplanet’s Bitcoin reserves now exceed 1,000 BTC. Metaplanet has now become one of the largest Bitcoin holders in Asia, with investment exceeding the $64 million milestone.
Semler Scientific is also ramping up its Bitcoin buying plans as it gradually transitions from a medical device company to a Bitcoin finance company.
Robinhood Markets, a financial services company that offers trading in stocks, ETFs and cryptocurrencies, has also been pursuing a Bitcoin accumulation strategy. According to data from Arkham Intelligence, Robinhood controls 136,755 BTC.
Bitcoin mining giant Marathon Digital Holdings owns 27,562 Bitcoins. After years of accumulation, the company sold 766 Bitcoins in March 2023. The third largest listed company holding Bitcoin is Tesla Inc., with 11,509 Bitcoins.
U.S. Strategic Bitcoin Reserve
Trump has pledged to improve the regulatory environment for cryptocurrencies and devote more government resources to supporting Bitcoin.
And, just like MicroStrategy, the U.S. government may continue its Bitcoin buying spree next year. According to the latest vision of the Bitcoin Strategic Reserve, the United States could purchase up to 1 million Bitcoins in the near future. This may force other countries to follow suit to keep up with the United States
Can corporate giants fuel the next bull market?
Wall Street billionaires turn to Bitcoin as an inflation hedge, marking a major shift in investment strategy and reflecting growing confidence in the cryptocurrency’s potential. With its impressive growth metrics, limited supply, and decentralized nature, Bitcoin offers an attractive alternative to traditional assets such as government bonds.
Wealth management clients of Wall Street banks such as Goldman Sachs, Bank of America and Morgan Stanley continued to modestly accumulate (or trade) Bitcoin (BTC) through spot Bitcoin ETFs during the third quarter.
Goldman Sachs reported acquiring approximately $418 million in various Bitcoin ETFs through its quarterly 13-F filing with the U.S. Securities and Exchange Commission. This includes $238 million worth of iShares Bitcoin Trust shares, equivalent to nearly 7 million shares as of June 30. In addition, Goldman Sachs also holds large positions in Fidelity Wise Origin Bitcoin ETF FBTC, Invesco Galaxy Bitcoin ETF BTCO, and other newly launched small positions. Launch of Bitcoin ETF.
Morgan Stanley was the first major Wall Street firm to give its 15,000 financial advisors the green light to begin marketing Bitcoin ETFs, specifically those issued by BlackRock and Fidelity, to clients with net worth of more than $1.5 million.
JPMorgan reports that Grayscale Bitcoin Fund has minimal exposure to cryptocurrencies with approximately $42,000 worth of exposure, along with $18,000 worth of ProShares Bitcoin Strategy ETF shares. HSBC holds nearly $3.6 million worth of spot Bitcoin, all from funds issued by Ark 21Shares, UBS holds about $300,000 worth of spot Bitcoin ETFs, and Bank of America holds a total of about $5.3 million worth of Bitcoin. , mainly from BlackRock and Fidelity.
“The cryptocurrency market is strong because our sentiment has shifted,” Galaxy Digital CEO Mike Novogratz told CNBC in May. “Cryptocurrency is an asset class now. This will be next year, this will be forever. That was not the case two years ago, but the risk has been removed.”
Company roadmap for BTC adoption
As high-net-worth and ultra-high-net-worth individuals show increasing interest in cryptocurrencies, institutions have adapted by incorporating digital assets into their investment portfolios and product offerings. This shift is critical to driving further institutional adoption.
The rise of secure custody services, including platforms like Coinbase Custody and Bitco, offers powerful solutions. Equipped with cutting-edge security measures, these services play a vital role in making it easier for institutions to enter the cryptocurrency market.
Institutional involvement means that cryptocurrencies are no longer just a speculative asset; they are legitimate investment opportunities. The launch of products designed to simplify investing, such as ETFs and trusts, allows retail investors to access investments in digital assets through familiar and regulated channels.
Many analysts and enthusiasts expect 2025 to begin another explosive bull market, potentially matching or exceeding 2021’s gains. Led by Bitcoin (BTC), the potential involvement of large institutions could ultimately push the price of Bitcoin to unprecedented levels.
