More and more large companies and institutions such as Square, Microstrategy and Massmutual are getting into Bitcoin.
MicroStrategy's Bitcoin-focused offering has grown to nearly $650 million after an initial purchase of $100 million. Square has invested $50 million in Bitcoin and said that cryptocurrency 'fits the company's goal.
The year 2020 seems to be the year when institutional investors are buying more and more Bitcoin. Several large companies and institutions are entering the world of crypto and have made a significant investment in Bitcoin.
As a result, retail interests in Bitcoin have skyrocketed; the value of BTC has reached its highest value since January 2018.
According to data from bitcointresuries.org as of mid-December 2020, 13 major companies have purchased Bitcoin, representing a total of 598,237 BTCs, or 2.85% of the total supply of 21 million BTCs.
In the list we can find:
Galaxy Digital Holdings: with an investment of $134,000,000 in June 2020.
Square inc.: 4,709 BTC or $ 50,000,000
Hut 8 Mining Corp: 2,954 BTC or $36,788,600
Voyager Digital LTD: 1,239 BTC or $ 7,927,180
Riot Blockchain, Inc: 1,053 BTC or $ 7,200,000
Advanced Bitcoin Technologies AG: 254 BTC or $ 2,117,980
Founded in 2009 by Jack Dorsey, Square, Inc. is a U.S. financial services, merchant services and mobile payment company based in San Francisco, California.
The company also has offices in the United States, Canada, Australia, Japan and the United Kingdom.
Square's products include:
As of August 2020, Square's market capitalization reached $66.5 billion and was trading at more than $151 per share.
Square is listed on the Nasdaq (NASDAQ:SQ). As a payment company, it has also expressed interest in Bitcoin. The company invested $50 million in Bitcoin and said that cryptocurrency 'was a company's goal.
On Thursday, October 08, 2020, Square announced that it had purchased 4,709 Bitcoins, representing approximately 1% of Square's total assets at the end of the second quarter of 2020.
In a press release, the company explained:
'Square believes that the cryptocurrency is an instrument of economic empowerment and provides a means for the world to participate in a global monetary system, which is aligned with the company's objective'.
Square intends 'to learn and participate in a disciplined manner as Bitcoin is increasingly adopted'.
Following this announcement, Bitcoin reacted positively, with an increase of 8%, from 10,500 to more than 11,300 dollars.
Massachusetts Mutual Life Insurance or MassMutual is one of the largest U.S. insurers with more than $235 billion in assets under management.
This mutual life insurance company was founded in 1851 by George W. Rice and offers financial products such as life insurance, disability insurance, long term care insurance and retirement services.
On Saturday, December 10, 2020, the company invested $100 million in Bitcoin. The transaction was done over-the-counter with NYDIG; Massmutual acquired a $5 million minority interest in NYDIG, a subsidiary of Stone Ridge that provides monetary cryptography services to institutions.
NYDIG specializes in digital asset management; already holding more than $2.3 billion in crypto for its clients and will provide custody services for MassMutual's Bitcoins.
On Friday, December 11, MicroStrategy announced that it had invested $650 million, up from $550 million previously, to purchase more Bitcoin; its total exposure to Bitcoin is now estimated at $1.1 billion.
MicroStrategy Inc. was founded in 1989 and is a publicly traded company. Founded by Michael J. Saylor and Sanju Bansal, the company provides business intelligence, mobile software, and cloud-based services. In other words, Microstrategy develops software for analyzing internal and external data to make business decisions and develop mobile applications.
MicroStrategy Inc. is listed on the Nasdaq (NASDAQ:MSTR). It invested approximately $250 million in August 2020 and an additional $175 million in September 2020, making it also the largest publicly traded company to invest in Bitcoin.
The company stated that its 'investment plan' for the coming quarter involved 'the use of Bitcoin as a primary cash reserve asset', as well as 'the purchase of additional Bitcoin with excess cash, subject to market conditions and business needs'.
The founder also stated that:
Bitcoin is growing exponentially, smarter, faster and stronger behind a wall of encrypted energy.
When they first purchased Bitcoin in September, MicroStrategy CFO Phong Le told their shareholders:
'You should expect us to buy even more Bitcoin because we are generating cash beyond what we need to run the business on a day-to-day basis.'
Shortly thereafter, the company recently raised $650 million in debt and will invest that amount in Bitcoin.
The company estimates that $634.9 million of this amount will be available for Bitcoin allocations (BTC, +1.42%) in accordance with its cash reserve policy. The amount of the offer was then increased to $650 million.
Some Wall Street analysts were not impressed by Microstrategy's successive investments in Bitcoins.
Michael Saylor, Microstrategy's CEO, has been accused by some of having turned his company into an investment company (IC) or launched an exchange-traded fund (ETF). Saylor denied these accusations in a Twitter post this week, stressing that 'BTC's ownership does not make Microstrategy an IC.
He explained that according to the 1940 Investment Co. Act of 1940, an investment company is a company that invests at least 40% of its assets in securities. But 'Bitcoin is not a security,' he said, citing the US Securities and Exchange Commission (SEC) definitions of digital assets. Mr. Saylor has always maintained that he chose Bitcoin as a store of value.
Crytocurrencies such as Bitcoin are becoming increasingly popular as an asset class. There is also evidence that large publicly traded companies are beginning to put significant amounts of money into Bitcoin. If this is just the beginning, would there be enough Bitcoin for everyone?
Written by Laetitia Harson, Project Manager
Cartam: Free Marketplace for Cryptocurrency Users
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