2021 saw a wave of institutional interest in cryptocurrency as an emerging asset class. Today, at least 27 publicly traded corporations hold 217,000 bitcoins at a current value of $9.4 billion USD.
Just one company, business software provider MicroStrategy, owns 121,000 of these bitcoins after outlining Bitcoin as the ‘central part of [their] new capital allocation strategy’. The investment in Bitcoin represents a hedge against the perceived devaluation of the US dollar over time and a belief that the asset is a dependable store of value with significant long term appreciation potential. MicroStrategy announced its first Bitcoin purchase in August 2020.
Microstrategy has continued this capital allocation strategy into 2022, announcing in late March that it has entered into an agreement with Silvergate Bank to borrow $204.75 million to ‘primarily buy Bitcoin’.
Electric car manufacturer and $900 billion dollar company Tesla is also a significant holder of Bitcoin, having announced it purchased the asset in February 2021. Today, Tesla holds 42,902 bitcoin at a current value of $1.85 billion USD. The investment in bitcoin represents an ‘updated investment policy aimed at diversifying and maximising the return on cash holdings’ as per its 2021 10K filing. The company further explains that it plans to accept bitcoin as a means of payment in the near future and that it believes its bitcoin position is highly liquid.
Even traditional, privately held companies have been accumulating cryptocurrency. In February 2022, accounting giant KPMG disclosed that its Canadian branch had made its first purchases of crypto assets to add to its corporate treasury. Although the firm declined to disclose the amount of Bitcoin and Ethereum purchased, KPMG spokesperson Roula Meditskos stated that ‘KPMG Canada is bullish on cryptocurrencies’ and that they ‘believe they are here to stay’.