Perhaps one of the best indicators of the mainstreaming of crypto is the appearance of bitcoin on the balance sheets of publicly listed companies.

With help from we have taken a look at the institutional landscape in this regard. Many of the corporate top holders are companies deeply involved in the crypto industry, such as Micheal Novogratz’s Galaxy Digital and bitcoin mining company Riot Blockchain, for example.

But the top two companies are not crypto-first outfits at all – MicroStrategy and Tesla – and both have billion dollar-plus bitcoin holdings.

MicroStrategy and Tesla go big on bitcoin

Michael Saylor’s MicroStrategy is a software and cloud services company, but in August 2020 it made its first purchase of bitcoin for its treasury. It has doubled-down on that decision by building up a balance sheet position of 125,051 BTC, which as of 12 April 2022 was valued at $5.025 billion.

MicroStrategy has effectively become a bitcoin ETF by proxy in the sense that if you want regulated exposure to the cryptocurrency, then you could do better than to buy its stock.

MicroStrategy has raised debt and used a $1 billion stock offering last year to buy bitcoin. Despite pull backs in the price from 2021’s all time high, the company’s decision has paid off.

Second on the list is Elon Musk’s Tesla. The world’s richest man is a crypto fan, judging by his Twitter commentary on the asset class.

In January 2021 the Tesla audit committee adopted a strategy to diversify the company’s treasury holdings. According to a filing with the SEC, some time after the audit committee decision the company bought bitcoin to hold on its balance sheet.

The electric vehicle company now has a holding of 42,902 bitcoins valued at $1.72 billion. The company did at one stage have plans to allow customers to purchase its products with bitcoin, as also shown in the filing:

“Moreover, we expect to begin accepting bitcoin as a form of payment for our products in the near future, subject to applicable laws and initially on a limited basis, which we may or may not liquidate upon receipt.”

However, Tesla has since backtracked on those plans, citing worries about the energy footprint of the bitcoin mining process. In fact it sold 10% of its bitcoin in the first quarter of 2021, which Musk at the time said was to demonstrate its liquidity.

Galaxy Digital at No.3 – Novogratz sees BTC at $500,000 and $1 million, but Fed tightening hurting for now

At number three is Galaxy Digital Holdings. Dubbed crypto’s largest merchant bank, Galaxy Digital holds 16,400 BTC. As a central player in the cryptoverse, it is not too surprising that the company should hold substantial amounts of BTC on its balance sheet.

Novogratz is naturally bullish on bitcoin. He has famously set price targets of $500,000 and $1 million on bitcoin. At the recent Bitcoin 2022 conference attended by 25,000 crypto enthusiasts, the former hedge fund manager said he sees bitcoin going to the moon after the Fed pauses on its tightening.

As a good investment manager, Novogratz doesn’t let his bullishness on bitcoin cloud his judgment. Last year, although he stuck by his contention that bitcoin was a better long-term investment than gold, he nevertheless said it was probably better to hold more gold than bitcoin at this point because of BTC’s price volatility.

The other top public company holders are mostly miners, such as Marathon, Riot, Hut 8 and Core Scientific or exchanges such as Voyager and Coinbase (which is just outside the top 10) or payments companies like Square. Many are also North American based.

What’s the future for bitcoin as a treasury asset?

So what does the future hold for bitcoin as a treasury asset? To be frank, there are not going to be that many chief financial officers or audit committees that are going to be recommending bitcoin adoption right now. As always, it is the cryptocurrency’s price volatility that reduces its appeal.

But, returning to the point made by Novogratz, when the Fed pauses on tightening it will bitcoin’s time to shine again.

Rising interest rates hurts bitcoin as it is currently being traded as a risk asset and its inflation-offsetting properties have been undermined by recent price action.

However, even though its attractiveness as an asset to hold during an inflationary period are not being borne out in the immediate near term, its advocates see that changing if inflation proves stickier than central banks initially envisaged. In such a scenario the temptation to diversify away from cash that is being continually eroded in value by inflation could grow significantly.

Corporate FOMO could be rising as hedge funds warm to crypto

The world’s largest hedge fund may be thinking along those lines. Ray Dalio’s Bridgewater Associates made it known last month that it was looking at investing in bitcoin, albeit via a crypto fund as opposed to holding the asset directly.

It joins a number of high profile hedge funds – such as Brevan Howard Master Fund and Tudor Investment – in seeking exposure to bitcoin, not to mention dozens of crypto hedge funds. According to PwC there were up to 200 active crypto hedge funds in existence in 2021.

In total, public and private companies, ETPs and governments hold 7.37% of the 21 million bitcoins that will ever come into existence. That proportion rises when we take into account bitcoin’s actual circulating supply of 19,010,600 and subtract the 2.78 to 3.79 million bitcoin that may have been lost, according to Chainalysis estimates from 2017.

Business2Community Bitcoin Treasury Report April 2022

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