Canadian investment bank Canaccord Genuity stated that the listing of Bitcoin ETFs has stimulated the market’s demand for spot Bitcoin, and more companies may follow in the footsteps of MicroStrategy by including Bitcoin on their balance sheets.
Summary:
Following MicroStrategy’s lead, Japanese company Metaplanet promises to buy 1 billion yen worth of Bitcoin, causing its stock price to surge by 89%.
Background:
Following MicroStrategy’s Bitcoin buying spree, Coinbase issues $1.1 billion in convertible bonds, causing its stock price to surge by 60%.
Table of Contents:
More companies may follow MicroStrategy in reserving Bitcoin
MicroStrategy’s stock price has surged over 7 times in five years
MicroStrategy’s Bitcoin holdings have a floating profit of $5.806 billion
If there is a surge in corporate Bitcoin purchases, how much incremental funding will it bring?
Canadian investment bank Canaccord Genuity, led by analyst Joseph Vafi, stated during the 2024 Digital Assets Symposium last week that the approval of Bitcoin spot ETFs by the U.S. SEC in January this year has also driven investment demand for spot BTC in the market.
More companies may follow MicroStrategy in reserving Bitcoin
Canaccord Genuity further stated that the impact of Bitcoin spot ETFs will continue to expand in the coming months, and some institutions, including certain sovereign funds, may have already invested in Bitcoin. The official reports of such investors may be made public soon.
Additionally, according to the new FASB accounting standards, coupled with persistent inflation, more companies may be prompted to follow in the footsteps of MicroStrategy and add Bitcoin to their corporate balance sheets as a reserve asset.
Samir Kerbage, Chief Investment Officer of Hashdex, also believes that the influence of Bitcoin spot ETFs will continue to grow.
Further Reading:
Following in MicroStrategy’s footsteps, Japanese company Metaplanet promises to buy 1 billion yen worth of Bitcoin, causing its stock price to surge by 89%.
MicroStrategy’s stock price has surged over 7 times in five years
MicroStrategy, the dominant holder of Bitcoin among U.S. listed companies, was established in 1989 as a technology company providing data analysis, software development, and cloud computing. However, its revenue performance was not particularly outstanding in recent years. It was not until August 2020 when MicroStrategy announced its continuous investment in Bitcoin that its stock price began to soar.
According to Google Finance, MicroStrategy’s stock price has skyrocketed from $140 to the current $1,270 in the past five years, an increase of nearly 750%. Two periods of high growth corresponded to Bitcoin bull markets, one in 2021 and the other this year.
Image Source: Google Finance
MicroStrategy’s Bitcoin holdings have a floating profit of $5.806 billion
According to current data from bitcointreasuries, MicroStrategy has spent $7.533 billion to purchase 214,246 Bitcoins so far. When the Bitcoin price broke through $70,000 again last week, the highest floating profit in its account reached $7.647 billion. Although the Bitcoin price has pulled back recently, it still has an unrealized profit of $5.806 billion.
Image Source: bitcointreasuries
With a successful case in MicroStrategy, Japanese company Metaplanet also announced this month that it will invest 1 billion yen to buy Bitcoin. Let’s imagine how much funding will enter the cryptocurrency market if companies start a surge in Bitcoin purchases.
Based on the current market value of the U.S. stock market at $51 trillion, if each company uses 1% of its market value to buy Bitcoin, it would equal an additional funding of $510 billion. It’s worth noting that the total market value of Bitcoin is only $1.22 trillion, which is enough to drive Bitcoin’s price to the next level.
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MicroStrategy’s Q4 purchase of “31,000 BTC” marks the largest growth in three years, making it a big winner with a current holding of 190,000 Bitcoins.