Matt Hougan, Chief Investment Officer (CIO) of Bitwise, has issued a <a target="_blank" href="https://experts.bitwiseinvestments.com/cio-memos/companies-buying-bitcoin-an-overlooked-megatrend”>bold prediction– Hundreds of companies will buy bitcoin as a treasury asset over the next 12 to 18 months. The change, which Hougan describes as a “overlooked megatrend,” has the potential to significantly influence the trajectory of the bitcoin market.
MicroStrategy: the standard bearer of corporate bitcoin adoption
MicroStrategy, led by Michael Saylor, has become synonymous with corporate bitcoin adoption. Although it ranks only 220th in the world by market capitalization, the company's influence on the bitcoin market is disproportionate. In 2024 alone, MicroStrategy acquired 257,000 btc, surpassing the total bitcoin mined that year (218,829 btc).
The company's ambitions show no signs of slowing down. It recently announced plans to raise $42 billion for additional bitcoin purchases, equivalent to 2.6 years of annual bitcoin production at the current rate.
Beyond MicroStrategy: a growing movement
MicroStrategy stock is just the tip of the iceberg. According to Hougan, 70 publicly traded companies already have bitcoin on their balance sheets. This list includes not only crypto-native companies like Coinbase and Marathon Digital, but also mainstream giants like Tesla, Block, and Mercado Libre. Together, these companies, excluding MicroStrategy, own 141,302 btc.
Private companies are also important players. SpaceX, Block.one and others collectively own at least 368,043 btc, according to data from BitcoinTreasuries.com. Hougan highlights that MicroStrategy's share of the corporate bitcoin market is already less than 50% and is likely to decline further as adoption grows.
What happens when larger companies, like Meta, which is currently considering a shareholder suggestion to add bitcoin to its balance sheet (20 times the size of MicroStrategy), begin to emulate MicroStrategy's strategy?
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Why Corporate bitcoin Adoption Is Set to Accelerate
Historically, two major barriers have limited corporate adoption of bitcoin: reputational risk and unfavorable accounting rules. Both have changed dramatically in recent months:
1. Reduced reputational risk
Until recently, businesses faced significant obstacles when adopting bitcoin. CEOs and boards of directors were concerned about shareholder lawsuits, regulatory scrutiny, and negative media coverage. However, as bitcoin gains acceptance at the institutional and government level, these fears are dissipating. Following the election, bitcoin has seen growing bipartisan support in Washington, making it increasingly “common, and even popular, to own bitcoin,” according to Hougan.
2. Favorable accounting changes
The Financial Accounting Standards Board (FASB) introduced a new guideline, ASU 2023-08, that fundamentally changes the way bitcoin is accounted for. Previously, companies were required to mark bitcoin as an intangible asset, forcing them to write down its value during price declines but preventing upward adjustments when prices rose.
Under the new rule, bitcoin can now be marked to market, allowing companies to recognize profits as its price appreciates. This change removes a major disincentive and is expected to drive exponential growth in corporate bitcoin holdings.
The “why” behind corporate bitcoin adoption
Corporate motivations for owning bitcoin mirror those of individual investors. Hougan describes several reasons:
- Inflation coverage: bitcoin is considered a safeguard against currency debasement.
- Speculation: Some companies aim to boost stock prices through exposure to bitcoin.
- Cultural Signage: Having bitcoin indicates alignment with innovation and attracts a younger, tech-savvy customer base.
- strategic hunches: For many, owning bitcoin is a calculated gamble.
Hougan says the motivations behind corporate adoption matter less than the magnitude of demand. “You just have to look at the numbers,” he writes. “Where does all this demand seem to be headed? And what would that mean for the market?”
A megatrend that could redefine markets
Hougan's memo paints a bullish picture of bitcoin's future. If hundreds of companies follow MicroStrategy's lead, pent-up demand could drive the price of bitcoin up significantly over the next year. With 70 companies already incorporated under less favorable conditions, the stage is set for an explosion in adoption.
This trend not only highlights bitcoin's evolving role as a treasury asset, but also underlines its growing acceptance as a mainstream financial instrument. For mature investors, the implications are clear: the next 18 months could mark a crucial period in bitcoin's journey from speculative asset to institutional cornerstone.
The time to buy is now
With reputational risks fading, accounting rules evolving, and demand accelerating, bitcoin's integration into corporate treasuries seems inevitable. Hougan's analysis invites investors to consider the broader implications:
If corporations do indeed adopt bitcoin at scale, what could that mean for the future of the market? For smart investors, the answer could lie in acting sooner rather than later.
Disclaimer: This article is for informational purposes only and should not be considered financial advice. Always do your own research before making any investment decisions.
