In a newly launched memo dated January 13, 2025, Matt Hougan, Chief Funding Officer (CIO) at Bitwise, argues that the phenomenon of firms buying Bitcoin for his or her treasuries is way extra widespread and influential than most traders notice. In line with Hougan, “We’ll see tons of of firms purchase Bitcoin for his or her treasuries over the following 12-18 months, and their purchases will raise the whole Bitcoin market considerably greater.”
Hougan’s memo, titled “Firms Shopping for Bitcoin: An Neglected Megatrend,” asserts that whereas MicroStrategy and its outspoken founder, Michael Saylor, usually dominate headlines, they’re merely essentially the most seen a part of a quickly increasing company motion into BTC.
Regardless of being ranked 220th globally by market capitalization—“a bit larger than Chipotle and a bit smaller than Sherwin-Williams,” in response to Hougan—MicroStrategy’s BTC acquisitions considerably exceed the whole new provide of Bitcoin mined final 12 months.
“Final 12 months, MicroStrategy purchased ~257,000 BTC… greater than all of the Bitcoin mined in 2024 (218,829 BTC),” Hougan wrote. He additionally famous that MicroStrategy has introduced plans to lift over $42 billion to buy extra Bitcoin—roughly equal to “about 2.6 years’ value of latest provide” at present manufacturing charges.
Hougan poses a direct query concerning what may occur if “actually large firms begin to take a web page from MicroStrategy’s ebook,” pointing particularly to Mark Zuckerberg’s Meta, which he described as “20x the dimensions of MicroStrategy.”
Whereas MicroStrategy’s strikes have garnered essentially the most consideration, Hougan emphasizes that many different firms are already together with BTC on their steadiness sheets. In complete, “70 publicly traded firms personal Bitcoin on their steadiness sheets,” a determine that encompasses each crypto-centric companies equivalent to Coinbase and Marathon Digital, and mainstream gamers like Block, Tesla, Semler Scientific, and Mercado Libre.
Collectively—excluding MicroStrategy—these firms maintain 141,302 BTC. Non-public firms additionally maintain vital quantities of bitcoin. Hougan cites knowledge from BitcoinTreasuries.com displaying that non-public companies like SpaceX and Block.one collectively personal a minimum of 368,043 BTC. “That’s vital. It implies that, even at the moment, MicroStrategy is lower than 50% of the company BTC market,” he wrote, predicting that MicroStrategy’s share “will likely be a small fraction of it will definitely.”
Why Bitcoin Company Adoption Is Set To Explode
Hougan factors to 2 fundamental components which have traditionally constrained company adoption—reputational threat and unfavorable accounting guidelines—and explains why each have shifted quickly.
“Final 12 months, the CEO of 1 giant publicly traded firm confronted big hurdles in including Bitcoin as a treasury asset,” he wrote, describing the persistent concern of unfavorable media protection, shareholder lawsuits, and regulatory consideration. “However reputational dangers have peeled again considerably up to now few months. Publish-election, with Washington embracing crypto on the highest ranges, it’s turning into far more commonplace—and common—to personal Bitcoin.”
Hougan then highlights a brand new accounting guideline launched by the Monetary Accounting Requirements Board (FASB) known as ASU 2023-08. Beforehand, BTC was labeled as an “intangible asset” topic to impairment testing, forcing firms to put in writing down the worth of their Bitcoin if its worth fell—however by no means permitting them to mark the worth again up if it rose. Now, firms can mark BTC to market and ebook a revenue when its worth appreciates.
“If 70 firms had been keen so as to add Bitcoin to their steadiness sheets when, from an accounting perspective, it actually may solely go down, think about what number of will add it… now,” Hougan wrote. “200? 5 hundred? A thousand?”
Addressing skepticism as to why firms select to carry BTC, Hougan contends that company motivations largely mirror these of particular person traders. “Some firms are grasping… Others are frightened in regards to the debasement of the greenback… Nonetheless others need to sign that they’re a part of the Bitcoin tribe… Some in all probability simply have a hunch,” he wrote.
Finally, nonetheless, Hougan maintains that understanding every firm’s motivations is much less vital than observing the magnitude of general demand. “You simply want to have a look at the numbers and ask your self two questions: The place does all of this demand from firms seem like it’s going? And what would that imply for the market?”
Hougan’s memo concludes on a bullish notice, forecasting that if main firms comply with the trail paved by MicroStrategy—now aided by extra favorable reputational and accounting climates—the inflow of company capital may considerably push BTC’s worth greater over the course of the approaching 12 months.
“My prediction: We’ll see tons of of firms purchase Bitcoin for his or her treasuries over the following 12-18 months.” – Matt Hougan, Bitwise CIO
At press time, BTC traded at $95,039.
Featured picture from YouTube, chart from TradingView.com
