Businesses now represent a growing segment of bitcoin users, holding 3.3 per cent of the total supply as of 18 August, according to data from financial services firm River.
This figure has surged by 587 per cent since June 2020, with a 30 per cent increase in the 12 months leading up to August.
River believes that while bitcoin’s adoption as a treasury asset has yet to go mainstream, its rapid acceleration is driven by its high liquidity, making it a viable option for businesses of all sizes.
“Unlike cash and short-term investments, bitcoin can be bought and sold 24 hours a day, seven days a week, allowing businesses to make financial decisions outside of regular business hours,” River said.
Speaking to InvestorDaily, Magnet Capital co-founder Egor Sidelska highlighted that businesses are increasingly recognising bitcoin as a safeguard against inflation, counterparty risk, and liquidity constraints.
“The value proposition is starting to become very real, and it’s now becoming a lot easier for not only publicly listed companies, but even small businesses to hold bitcoin positions on their balance sheet,” Sidelska said.
“You’ll start to see these businesses in the US that basically do that,” he added. “Because you can either pick a choice of, this year, earn 5 per cent in treasuries, or earn 30 per cent holding it in bitcoin, and because it’s liquid, you can sell whenever you want.”
River’s data revealed that five companies - MicroStrategy, Block.one, Tether, BitMEX, and Xapo – hold a combined 559,000 bitcoin, which accounts for 82 per cent of all corporate bitcoin holdings. In fact, MicroStrategy and Tether alone made up 85 per cent of all publicly reported business bitcoin purchases in the first half of 2024.
MicroStrategy, in particular, has garnered attention, with the business intelligence company becoming the first publicly traded firm to adopt bitcoin as its primary treasury reserve asset.
“MicroStrategy was a software business, and now it’s turned into, basically, a reverse bitcoin ETF,” Sidelska told InvestorDaily.
“They hold 402,000 coins, so their stock has gone absolutely bananas.”
Thanks to its well-timed capital raises, MicroStrategy has outperformed bitcoin’s price by 93 per cent since its first purchase, with its stock now trading at a multiple above the net asset value of its bitcoin holdings.
Sidelska said: “They are trading at a multiple above the net asset value of bitcoin alone. So they’ve got this campaign running, led by Michael Saylor, that is basically telling other businesses how they can use their excess cash reserves to put bitcoin on their balance sheet.”
However, River cautioned that the success of companies like MicroStrategy may not be easily replicable.
“The strategy heavily depends on the liquidity of US capital markets, with reliable funding sources from bond and stock investors,” the financial services firm said.
While some companies, like Japan-based Metaplanet, have adopted similar strategies by leveraging foreign capital markets, River believes that using bitcoin as a primary reserve asset remains a viable strategy for businesses of all sizes.
The price of bitcoin stood above US$105,000 on Monday 12 pm AEST.
