As a seasoned observer of the ever-evolving financial landscape, I find it fascinating to witness the growing trend of corporations adopting Bitcoin as part of their treasury reserves. This shift towards digital assets is not only a testament to the maturing cryptocurrency market but also an indication of the trust these companies place in the long-term potential of this innovative technology.
Microsoft’s shareholders have rejected the concept of holding Bitcoin as a reserve, unlike some other prominent corporations who advocate for this approach. Let me explain their reasoning.
Bitcoin (BTC) is frequently compared to “digital gold” due to its limited supply of only 21 million units, which gives it the potential to serve as a protective asset against the depreciation of traditional currencies and inflation.
Today, the distinctive traits of Bitcoin have made it a compelling choice for corporate treasuries. It offers a way to diversify holdings beyond conventional assets such as cash, equities, and bonds.
On a global scale, Bitcoin is known for its high liquidity, and its past performance indicates substantial long-term growth. This digital currency once peaked at more than $108,000 on December 17, marking a new record high.
But there’s no shortage of risks.
A board could choose not to establish a Bitcoin reserve because of the coin’s high price fluctuations, which might result in significant losses during economic downturns. Furthermore, regulatory risks loom as governments continue to develop cryptocurrency regulations. Lastly, liquidity issues during market declines can exacerbate price drops when disposing of assets.
Therefore, it’s not surprising that, on December 10th, Microsoft’s board reflected the ongoing cryptocurrency skepticism of its co-founder Bill Gates and advised against pursuing a Bitcoin treasury proposal. In fact, Gates himself has previously labeled crypto as “purely based on the greater fool theory” – a rather harsh criticism.
In simpler terms, Michael Saylor, who is known for promoting Bitcoin and also serves as the chairman of MicroStrategy, attempted to persuade Microsoft by highlighting Bitcoin’s exceptional performance and boasting about the surge in MicroStrategy’s stock following their Bitcoin investment. His argument was that investing in Bitcoin could potentially increase Microsoft’s market value while providing a protective financial role, similar to an angel guardian.
Microsoft’s response? No, thanks.
Meanwhile, at least 10 other companies are embracing the MicroStrategy playbook.
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Genius Group
In November, the AI-focused education company, Genius Group, revealed they had bought 110 Bitcoins for a total of $10 million, which equates to approximately $90,932 per Bitcoin. This acquisition was part of their pledge to adopt what they termed a “Bitcoin-first” approach, meaning that at least 90% of their existing and future financial holdings would be kept in Bitcoin. Their initial goal is to amass a Bitcoin portfolio worth $120 million.
This month, the firm boosted its Bitcoins in storage by purchasing 194 Bitcoins valued at approximately $18 million, with each Bitcoin costing around $92,728 on average.
The CEO of Genius Group, Roger Hamilton, acknowledged that Saylor’s Bitcoin reserve strategy served as inspiration. He further stated that “as more businesses come to understand the advantages of maintaining a Bitcoin reserves, they will be empowered with a straightforward roadmap to guide them through the process.
Worksport
In simple terms, an American company named Worksport, which specializes in offering solutions for pickup trucks, is now incorporating cryptocurrency into its financial management strategies.
On December 5th, a Nasdaq-listed firm disclosed plans to incorporate Bitcoin (BTC) and Ripple (XRP) into its cash reserves. This decision was made pursuant to a resolution passed by the company’s board, authorizing an initial investment of $5 million in both cryptocurrencies.
In the announcement, Worksport mentioned that they will dedicate 10% of any extra operational funds they have toward this corporate shift.
Steven Rossi, CEO of Worksport, stated that adopting Bitcoin (BTC) and XRP (Ripple) demonstrates our dedication to being at the forefront of market developments, all while focusing on operational effectiveness and increasing shareholder worth. As we broaden our product line and global presence, cryptocurrency could prove to be a powerful strategic asset.
Amazon
Shareholders headed by the National Center for Public Policy Research are advocating that Amazon’s board consider exploring the potential advantages of incorporating Bitcoin into their financial planning approach, based in Seattle.
The submission made on December 6th is designed to investigate if Bitcoin can safeguard and boost the worth of shareholders, particularly during prolonged inflation and decreasing returns from conventional investments.
The National Center underscores Bitcoin’s impressive track record—a 131% increase in the last year and a 1,246% surge over five years—as a demonstration of its possible role as a shield against inflation and a profitable investment. Additionally, they draw attention to worries about Amazon’s $88 billion cash reserves losing value due to an average annual inflation rate of 4.95% over the past four years, which could erode their purchasing power.
This action showcases the growing impact of shareholders’ proposals on corporations’ decisions, whereby they use their rights as shareholders to champion fiscal strategies that mitigate potential risks and boost long-term worth.
MicroStrategy
It appears that MicroStrategy’s CEO, Saylor, is one of the most outspoken advocates for Bitcoin. As of last week, he boosted the company’s total Bitcoins to an impressive 439,000.
Consequently, Saylor’s move solidifies MicroStrategy’s status as the leading corporate Bitcoin holder, viewing it as a valuable long-term investment.
On the December 18th edition of the Open Interest program airing on Bloomberg Television, Saylor expressed readiness to offer counsel to President-elect Donald Trump regarding the formulation of a comprehensive digital assets strategy within the United States.
However, Saylor remains under close examination: Analyst Jacob King has branded MicroStrategy’s Bitcoin-centric strategy as a “massive fraud,” asserting that it is unstable and headed towards failure.
MicroStrategy’s business strategy can be seen as a self-reinforcing cycle, often perceived as questionable: The company raises funds through debt or equity sales, which are then used to purchase Bitcoin. This action increases the price of Bitcoin. In turn, this causes an increase in MicroStrategy’s market capitalization, boosts its index weight, and attracts more investors who view it as a trendy investment. With a higher valuation, MicroStrategy can continue to issue debt or equity for further Bitcoin purchases.
— Jacob King (@JacobKinge) December 17, 2024
Marathon Digital Holdings
Among the top Bitcoin mining firms, Marathon is in possession of approximately 44,394 Bitcoins. The core focus of its operations lies solely in mining and keeping Bitcoin as a key component of its assets portfolio.
In July, the company announced it would follow a strategy known as “full HODL” for its Bitcoin reserves, meaning it keeps all Bitcoin it mines internally, along with any additional Bitcoin acquired through market purchases.
As a dedicated crypto investor, I wholeheartedly embrace the HODL approach, which underscores my conviction in the enduring worth of Bitcoin over the long haul. I firmly believe that Bitcoin stands out as the most exceptional treasure reserve asset globally, and I advocate for sovereign wealth funds to incorporate it into their holdings. I passionately urge governments and corporations alike to consider Bitcoin as a valuable addition to their reserve assets.
Tesla
In the year 2021, Tesla invested approximately $1.5 billion in Bitcoin, which they now own around 9,720 units of. Under Elon Musk’s leadership, Tesla is one of the major corporations that hold Bitcoin.
According to BitcoinTreasuries data, Tesla ranks fourth among U.S. public companies in terms of Bitcoin holdings, with MicroStrategy, MARA Holdings, and Riot Platforms reportedly owning more.
Last October, it was reported that an undisclosed amount of my Bitcoin investments, valued at approximately $765 million, were transferred from the electric vehicle company’s wallets to other unidentified ones.
Coinbase
The cryptocurrency platform keeps 9,480 Bitcoins as a reserve, taking advantage of its status as a significant figure in the Bitcoin and digital assets marketplace.
The company headed by Brian Armstrong maintains significant quantities of Bitcoin, functioning as both an exchange and a conversion platform. It’s also known for providing secure custody services, with notable clients such as BlackRock, Grayscale, 21Shares, Invesco, Valkyrie, Wisdom Tree, and Franklin Templeton from the Bitcoin ETF group.
Therefore, Coinbase has a Bitcoin treasury for itself and oversees others.
Hut 8 Mining Corp
Last Thursday, it was announced by crypto.news that Hut 8, a Bitcoin mining corporation, increased their Bitcoin holdings by 990 coins.
As a crypto investor, I’ve noticed that our company has invested approximately $100 million to boost its overall Bitcoin holdings to 10,096 BTC. Now, this reserve, valued at over a billion dollars, positions us among the top corporate Bitcoin owners worldwide.
Under CEO Asher Genoot’s leadership, the firm acquired Bitcoins at an overall cost of approximately $101,710 each, which was substantially more than their total expense per Bitcoin, averaging around $24,484.
Block Inc.
The company, previously known as Square, possesses a total of 8,027 Bitcoins, which it utilizes as part of its plan to seamlessly incorporate Bitcoin within traditional financial systems.
The company founded by Jack Dorsey is extremely optimistic about Bitcoin, as evidenced by its recent decision to reorient the entire business toward the field of cryptocurrency mining.
Block opted to reduce investment in the music streaming platform TIDAL, while a project called TBD, which aims at decentralizing the internet, will be phased out. Instead, the company is concentrating on growing its influence within the Bitcoin mining industry.
In 2021, the company Block obtained TIDAL at an estimated cost of around $300 million. Since then, the platform has faced challenges, as suggested by news about workforce downsizing and a $132.3 million reduction in value (impairment charge).
OneMedNet
OneMedNet Corp., as of Nov. 12, owns some 34 Bitcoins.
Investor Off The Chain Capital, who has backed OneMedNet, was equally motivated by Saylor’s approach and wagered that Bitcoin doesn’t merely serve as a protective measure, but could also propel the advancement of OneMedNet’s healthcare data innovations.
In simpler terms, Aaron Green, who heads the company, shared that they plan to keep putting some of their funds into Bitcoin. This move is intended not just for ensuring the firm’s financial security, but also for fostering advancement and creativity within their iRWD system.
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2024-12-22 00:51