Key Points
- Microsoft has rejected the idea of a Bitcoin treasury, while other companies continue to adopt this strategy.
- Bitcoin’s fixed supply and potential as a hedge against inflation make it an attractive addition to corporate treasuries.
Microsoft shareholders recently dismissed the idea of a Bitcoin treasury. However, several other prominent companies are adopting this strategy.
Bitcoin as “Digital Gold”
Bitcoin, often compared to “digital gold,” has a fixed supply of 21 million coins. This limitation positions it as a potential safeguard against currency devaluation and inflation.
In the current financial climate, Bitcoin’s unique features make it an appealing addition to corporate treasuries. It can provide balance to traditional assets like cash, stocks, and bonds.
As one of the most liquid assets globally, Bitcoin’s historical performance has shown significant long-term value appreciation. For instance, it reached an all-time high of over $108,000 on Dec. 17.
Concerns about Bitcoin Treasury
However, the adoption of a Bitcoin treasury is not without risks.
Boards may hesitate due to Bitcoin’s extreme price volatility, which can result in substantial losses during market downturns. Regulatory uncertainties and liquidity challenges during market slumps also pose potential threats.
Consequently, Microsoft’s board, on Dec. 10, recommended rejecting the proposal for a Bitcoin treasury. This decision aligns with the long-standing crypto skepticism of its co-founder, Bill Gates.
Despite Microsoft’s rejection, at least 10 other companies are following the playbook of MicroStrategy, a significant Bitcoin holder.
Companies Embracing Bitcoin Treasury
Genius Group, an AI-powered education group, announced in November that it had purchased 110 Bitcoin for $10 million. The company plans to commit 90% or more of its current and future reserves to Bitcoin.
Worksport, a U.S.-based provider of pickup truck solutions, is also adding cryptocurrency to its corporate treasury strategy. The company announced on Dec. 5 that it would be adding Bitcoin and XRP to its treasury assets.
Amazon shareholders are urging the company’s board to assess the potential benefits of adding Bitcoin to the company’s financial strategy. The proposal aims to explore whether Bitcoin could enhance shareholder value, particularly in the face of persistent inflation and declining yields from traditional assets.
MicroStrategy’s Saylor has been a vocal Bitcoin supporter. As of the past week, the company’s total Bitcoin holdings increased to 439,000.
Marathon Digital Holdings, one of the largest Bitcoin mining companies, owns 44,394 BTC. Its business model revolves entirely around mining and holding Bitcoin as part of its assets.
Tesla, which initially bought $1.5 billion worth of Bitcoin in 2021, currently holds 9,720 BTC. BitcoinTreasuries data shows that Tesla is the fourth-largest holder of Bitcoin among U.S. public companies with crypto treasuries.
Coinbase, the cryptocurrency exchange, holds 9,480 BTC as part of its reserves, leveraging its position as a major player in the digital asset ecosystem.
Hut 8, a Bitcoin mining company, recently added 990 Bitcoin to its reserves. The company spent approximately $100 million to increase its total holdings to 10,096 BTC.
Block Inc., formerly known as Square, holds 8,027 BTC as part of its strategy to integrate Bitcoin into mainstream finance. The company has confirmed a company-wide pivot towards the cryptocurrency mining sector.
Lastly, OneMedNet Corp. owns some 34 Bitcoins. Off The Chain Capital, an investor in OneMedNet, was also inspired by Saylor, betting that Bitcoin isn’t just a hedge but a springboard for its healthcare data innovation.