Thursday, September 29, 2022

Top Public Companies Investing In Bitcoin

When Bitcoin was introduced, no one ever thought, publicly traded corporations would show interest in it. The reason behind this was digital assets’ volatile nature. None of the companies around the world wanted to risk their investments. 

But last year, things started to change. Due to the outbreak of COVID-19, the world’s economy slowly started to come down. Almost every industry, globally, was suffering a loss.

However, it was not the same with the cryptocurrency industry. It did come down to its lowest but it helped the countries maintain their economy. The public companies were a bit amazed by the performance of cryptocurrency, therefore, many of them decided to invest in it.

MicroStrategy became the first public company to buy a huge amount of Bitcoins worth $25 million. This was then followed by a few others like Tesla and Square.

These companies also opened up the opportunity gates for those investors who did not want to buy Bitcoin directly. The investors could just buy the shares of public companies, investing in cryptocurrency, to gain exposure to the assets.

Investing in cryptocurrency not only helped the top companies around the world, but also the crypto industry. The company’s movement regarding cryptocurrency affects the price of the digital asset market.

Like, recently, when the owner of Tesla announced to accept Bitcoin as a payment for the electric car, the market shoots up. But later, when Tesla notified that it would not be accepting the crypto payment, the market collapsed. 

Here is the list of the top five publicly traded companies, that have shown interest in Bitcoin:

  1. MicroStrategy- The cloud software company continued its Bitcoin buying spree, throughout 2021. To date, the company owns 105,085 BTC worth over $3.3 billion. In fact, the CEO of the company Michael Saylor, himself owns a huge amount of Bitcoins. 

However, once there was a time when Saylor did not support Bitcoin. One of his tweets from 2013, stated: “Bitcoin days were numbered, and would go the way of online gambling: competed or regulated out of existence.”

Today, the CEO of MicroStrategy holds 17732 BTC, whose worth is around $565 million.

MicroStrategy’s investment is considered to be one of the biggest development for the crypto industry. The country made its first investment in August and September 2020.

While announcing its initial purchase of $250 million worth of Bitcoin, Saylor, stated, “This investment reflects our belief that Bitcoin, as the world’s most widely-adopted cryptocurrency, is a dependable store of value and an attractive investment asset with more long-term appreciation potential than holding cash.”

Apart from MicroStrategy, itself, the crypto investment was profitable for the investors and institutions that bought cloud software company’s shares. 

  • Tesla- The Electric car manufacturer company is another big firm to invest in Bitcoin. Along with this, the company made an SEC filing revealing that it bought cryptocurrency worth around $1.50 billion. 

In Q1 of 2021, the CEO of Tesla, Elon Musk, sold 10 percent of the company’s holdings “to prove liquidity of Bitcoin as an alternative to holding cash on the balance sheet.”

Musk took months to decide whether to invest in crypto or not. He held a discussion on Twitter, to know whether investing in Bitcoin is worthed or not. In later 2020, the CEO of MicroStrategy shared his ‘playbook’ for Bitcoin investing with Musk. Saylor explained to the owner of Tesla that by investing in Bitcoin the company would be doing a ‘$100 billion favor’ on its shareholders.

Musk read the market for a couple of months and by the end of January 2021, #Bitcoin appeared on his Twitter bio. It appeared that the CEO of Tesla was hinting to make his future investment in cryptos. 

And it was true, a month later, his company invested in Bitcoin. Following that the company soon announced to accept the crypto payment. But this did not last for long, as Tesla’s CEO abruptly notified his audience that the company would no longer be accepting crypto payments. 

Musk stated that due to the increasing use of fossil fuels for crypto mining activities, the company has decided to halt the crypto payments. He further revealed that Tesla would not be selling any of its holdings. 

As per the report, Tesla owns a total of 42,902 BTC worth $1.37 billion. But presently, as the market has slumped down it is being assumed that the electric car manufacturer would suffer an impairment loss between $25 million and $100 million in the next quarter.

  • Galaxy Digital Holdings- It’s a merchant banking institution dedicated to digital assets and blockchain technology. The company is the largest institutional holder of Bitcoin. 

Michael Novogratz, the founder of Galaxy Digital, is a supporter of Bitcoin for quite a long time. Soon after he introduced the company, Novogratz collaborated with Block.one and BlockFi. 

In 2020, when the US government announced the stimulus measures in response to the outbreak of coronavirus, Novogratz noted that pandemic drove investors’ interest in cryptocurrencies. He called it a Bitcoin’s moment.

As per the report, currently, Galaxy Digital Holdings own 16,400 BTC worth over $522 million.

  • Voyager Digital Ltd- It is a cryptocurrency brokerage company that offers access to assets and commission-free trading. 

According to a report, this quarter the company generated a revenue of $60.4million, which is 16x from the previous quarter. 

While talking about the company’s quarterly performance, Steven Ehlrich, the CEO of the company stated, “We saw exponential adoption of cryptocurrencies as a recognized and investable asset class.”

The company owns a total of 12,260 BTC worth around $390 million.

  • Square Inc.- In October 2020, the company bought 4,709 Bitcoin, which cost $50 million at that time. Since then, the payment company has been continuing the ritual of investment. 

As per the report, by Q4, 2020, the company scooped up another $170 million. However, it did not come as surprise to anyone, as everyone in the industry knew that the CEO of the payment company, Jack Dorsey, is a big fan of cryptocurrency.

Since the company started investing in Bitcoin, it has been a loyal investor to it. Today, Square Inc. holds 8,207 BTC, worth $255 million and it probably continues to invest in the digital asset for a long time. However, it is not confirmed yet. 

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