Public companies seek exposure to crypto as BTC holdings surge in 2021
The year 2021 was good for the cryptocurrency market. A series of events saw cryptocurrencies, especially Bitcoin, adopted by institutional players. The amount of BTC held by large private corporations during the year increased significantly. The rise in Bitcoin holdings by private corporations in 2021 has overshadowed the recorded increase in 2020.
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Public companies gain exposure to Bitcoin
A tweet by Willy Woo on January 3 depicted this growth in the Bitcoin holdings of public companies. The tweet from the on-chain analysts stated, “significant BTC have gained market share from spot ETFs as a way to access BTC exposure on public equity markets.”
In 2021, many companies were exposed to cryptocurrencies and learned more about the asset class. From February 3 to February 4, 2021, MicroStrategy hosted the “Bitcoin for Corporations” conference. The online conference sought to look into the legal framework of firms that want to integrate Bitcoin in their operations.
MicroStrategy has made headlines for the most part of2021for being extremely bullish on Bitcoin. The business intelligence company has continued to accumulate more coins, and it currently owns around $6 billion in cryptocurrencies.
The most recent Bitcoin purchase from MicroStrategy was on December 30, as the company added another 1914 Bitcoin valued at $94million. The first Bitcoin purchase by MicroStrategy was in August 2020, and since then, it has recorded $2.1 billion in profits.
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Companies increasing their market share in Bitcoin
In his tweet, Woo provided a chart depicting the Bitcoin holdings in ETFs and the treasuries of public companies. The data focused on spot exchange-traded funds (ETFs) and not the ETFs focused on futures. Unlike spot ETFs where the instrument directly tracks Bitcoin’s price, ETF futures expose investors to contracts at the Chicago Mercantile Exchange futures market.
Grayscale, the world’s largest digital asset management company, boasts the highest market share. By the end of 2021, the company’s Bitcoin holdings were 645,199. This represents 71% of the broader market, given that Woo’s chart shows all spot ETFs and Bitcoin holdings by corporations tally to 903,988 BTC.
On the other hand, MicroStrategy is the largest corporate investor in cryptocurrencies. The company holds 124,391 Bitcoin valued at around $5.8 billion as per the data from BitcoinTreasuries. The other large investor is Tesla, with around 43,200 BTC valued at around $2 billion.
The rise in the number of coins held by large corporations started in 2020. During the year, the number of Bitcoin held by public corporations increased by 400% to $3.6 billion.
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