Top 5 Corporate Bitcoin (BTC) Buyers Boosting Crypto Confidence
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Bitcoin (BTC) added another milestone to its widespread acceptance. In 2020 and 2021, companies started adding the coins to their balance sheet. The scale and risk appetite differed from previous corporate forays, where mining was the primary objective.
The series of public BTC acquisitions or portfolio expansions happened when market prices continued to make their records, rapidly climbing from the previous peak near $20,000 to as high as $58,000.
Firms chose to acquire BTC for different reasons, with most moves seen as bullish and positive for wider adoption. Institutional demand has not been correlated with new record highs, but is taken as a sign of support for BTC value.
Corporate buying has different motivations. Some companies buy BTC to build retail products and expand adoption to investors not keen on learning how to use the blockchain themselves. Others simply use BTC as a carrier of value, and build their treasury with an asset considered to have anti-inflationary potential.
Here is how some of the most significant BTC buyers stack their coins:
Tesla: $1.5B Treasury
The cash-rich Tesla (NASDAQ:TSLA) reportedly bought $1.5B worth of BTC coins, around a price of $35,000. After the public announcement on social media, BTC reacted immediately, rising to above $45,000.
Internet researchers are still on the tracks of the alleged Tesla Bitcoin address. So far, there are 42 wallets containing more than $1B worth of BTC, and there is no way to know which one belongs to Tesla.
Reportedly, Coindesk assisted the company in acquiring around 50,000 BTC, routed through OTC desks to avoid swaying the open market. It is uncertain what role the BTC will serve, beyond an anti-inflationary cash-like asset with the potential to appreciate significantly.
So far, Tesla, Inc. has only hinted at accepting BTC for car purchases.
Square App and Retail Demand
The buying of Square reflected two trends – one, the demand for BTC from its Cash App, and the other, the firm itself building a stock of coins for future use.
Reports show Square holds about 5% of its assets in BTC, after a two-step purchase worth a total of $230M, acquired at different prices. Additionally, Square revealed $1.76B in revenues related to BTC for the fourth quarter of 2020, with expectations the trend would continue.
MicroStrategy: Continued BTC Investment
MicroStrategy became the bellwether of corporate purchasing, going public with its choice even before Tesla. The decision to buy BTC started with the company’s founder decision to acquire BTC at around the $9,000 level.
The company started buying BTC before the bull market, and continues to add to its wallet. As of March 1, its entire BTC holdings exceeded $4B. MicroStrategy first bought in at an average price of $23,000, building a wallet of more than 90,000 BTC. Its latest purchase of another 19,452 BTC was at an average price above $52,000.
The latest move was viewed as bullish, signalling an expectation for further appreciation in BTC prices. Just weeks after the purchase, BTC revisited the $54,000 level, re-sparking enthusiasm for another rally.
Grayscale Padding Out its Funds
Grayscale is another case of satisfying retail demand and needing the BTC to build up its products. The fund, which packages a fraction of BTC and other coins for its OTC-traded products, now has $33B in assets under management.
The Grayscale Bitcoin Trust is entirely transparent, and has been used as an indicator for the bullish or bearish attitudes on the market. At certain points, retail demand has raised the effective BTC bid on Grayscale above the market prices on crypto-to-crypto exchanges.
The Grayscale BTC trust currently may have to catch up with market prices, as its effective BTC valuation is in the $45K range.
Grayscale remains riskier for retail investors, though the company promises to keep its crypto assets in the safest possible wallets, with little risk of hacks or exploits.
The Newcomer: Norway’s Aker
The Norwegian industrial holding Aker ASA was an unlikely newcomer, showing international interest in BTC purchases. Aker only put in $58M in BTC, a relatively small investment both compared to other buyers and to the size of the oil and gas energy holding.
The latest buy-in is part of Aker’s expansion into alternative energy and digital technologies. For now, the move does not have the potential to sway the market.
Corporate buy-ins and treasuries of BTC raise the confidence in the digital asset, diminishing the greatest fear that it is not valued enough and its market price may slide to nothing. For BTC, speculation on crypto-to-crypto exchanges continues, and daily price swings are still possible. Corporate wallets, however, take coins off the market with a confidence in BTC’s potential to offset market risks in the long term.
As of March 9, BTC once again rallied above $54,000 during the Asian market active hours. The overall attitude remains bullish, with predictions of breaking to new highs.
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