Bitwise Chief Funding Officer Matthew Hougan believes that corporations including Bitcoin (BTC) to their steadiness sheets are now not an anomaly, however an rising megatrend that would rework the crypto market this yr.
In a latest observe to purchasers, Hougan emphasised that MicroStrategy is making headlines for its aggressive BTC accumulation technique. The corporate raised roughly 257,000 BTC, greater than all of the bitcoins mined final yr, and plans to lift one other $42 billion to proceed its purchases.
Hougan famous that this development goes far past MicroStrategy. As of January 14, 70 publicly traded corporations maintain bitcoin on their steadiness sheets, together with family names like Tesla, Block and Mercado Libre.
These corporations maintain a mixed 141,302 BTC, whereas non-public corporations like SpaceX and Block.one have disclosed holdings of at the least 368 BTC.
Regulatory shifts
In line with Hougan, the introduction of ASU 2023-08 by the Monetary Accounting Requirements Board (FASB) is a recreation changer. This rule permits publicly traded corporations to mark their bitcoin holdings to market worth, permitting them to file income when the value of bitcoin rises.
Beforehand, bitcoin was handled as an “intangible asset,” forcing corporations to write down off its worth if the value fell, however not permitting them to acknowledge positive factors when it rose.
With declining reputational dangers and a extra favorable accounting atmosphere, Hougan predicts an explosion within the variety of corporations shopping for bitcoin. He estimates that the present variety of 70 may develop to tons of, even hundreds, within the subsequent 12 to 18 months.
Moreover, Hougan argues that corporations purchase bitcoins for a similar causes as people. Some see it as a hedge towards greenback depreciation, others as a speculative asset to spice up inventory costs, and nonetheless others as a sign of innovation to draw prospects and expertise.
Whereas motivations differ, he believes the inflow of company demand has the potential to push bitcoin costs considerably increased, particularly as main gamers like Meta and others contemplate entry.
Hougan closes the paper by stating that retail buyers might not perceive why each firm is shopping for Bitcoin. As an alternative, they need to ask themselves the place this demand goes and what it means for the market.
