MicroStrategy's Bitcoin Purchases Are an 'Overlooked Megatrend'

Matt Hougan, Bitwise's chief investment officer (CIO), said the buying and holding of bitcoin by companies like MicroStrategy is an “overlooked megatrend” that could significantly impact the bitcoin market this year.

Hougan said in a <a target="_blank" href="https://experts.bitwiseinvestments.com/cio-memos/companies-buying-bitcoin-an-overlooked-megatrend”>weekly bit by bit note that 70 publicly traded companies have bitcoin on their balance sheets, with MicroStrategy leading the way.

“We will see hundreds of companies buying bitcoin for their treasuries over the next 12 to 18 months, and their purchases will substantially lift the entire bitcoin market, and their purchases will substantially lift the entire bitcoin market,” he said.

MicroStrategy currently holds 447,470 bitcoin, valued at over $44 billion. This follows the company's recent purchase of bitcoin on January 6, where it invested $101 million to acquire 1,070 btc at a price of $94,004 per coin.

Being highlighted as the “Largest btc Corporate bitcoin” doesn't capture the bigger picture of what's going on. As Hougan emphasized, many investors still see MicroStrategy as an exception, without recognizing the growing trend of other companies also adopting bitcoin.

What the CIO astutely observed is that MicroStrategy, which is ranked 220th by market cap, acquired 257,000 btc in 2024 alone, which is more than all the bitcoin mined in the same year (218,829 btc).

“Let me say it again: a company the size of Chipotle bought more than 100% of all new bitcoin supply in 2024,” Hougan added, emphasizing that “MicroStrategy recently announced plans to raise more than $42 billion to acquire more bitcoins”. which equates to around 2.6 years of new supply.

<blockquote class="twitter-tweet” data-width=”550″ data-dnt=”true” wp_automatic_readability=”10.872727272727″>

“I've come away thinking this is a much bigger trend than most people realize. In fact, I think it's a genuine megatrend.”<a target="_blank" href="https://twitter.com/Matt_Hougan?ref_src=twsrc%5Etfw”>@Matt_Hougan In a memo to investors this week about the rise of companies in the bitcoin standard.

Give it a read. Link below – pic.twitter.com/OOyhj9DYgO

– Hunter Horsley (@HHorsley) <a target="_blank" href="https://twitter.com/HHorsley/status/1878952869833150642?ref_src=twsrc%5Etfw”>January 13, 2025

“What will happen if really big companies start taking a page from MicroStrategy's book?” Hougan asks.

Other publicly traded companies, whether in the crypto space or not, have also acquired bitcoin. These include CoinBase, Tesla, Semlar Scientific and Mercado Libre, which together hold 141,302 btc.

Bitwise also owns bitcoin, as do private companies like SpaceX and Block.one.

The number of companies acquiring bitcoin is “about to explode”

Hougan firmly believes that the number of companies buying bitcoin is “about to explode,” as reputational risk, once a huge barrier, is about to decrease completely. Now that Washington embraces cryptocurrencies and makes them more common, businesses feel freer to add btc to their financial sheets.

The second reason, more important to Hougan, is the new rule introduced by the Financial Accounting Standards Board (FASB)the regulatory body that decides how publicly traded companies must report their finances. The new rule called ASU 2023-08 changes the way bitcoin is accounted for under GAAP.

Previously, GAAP classified bitcoin as an “intangible asset” and companies had to write down its value if the price fell. On the other hand, companies were not allowed to increase it if the price rose. Under the new rule, “companies can mark to market value and book a profit,” Hougan said.

Hougan emphasized the significant change in sentiment, stating:

“If 70 companies were willing to add bitcoin to their balance sheets when, from an accounting perspective, it could literally only go down, imagine how many would add it to their balance sheets now. Two hundred? Five hundred? Thousand?

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