Corporate adoption of Bitcoin continues to rise: 30% growth rate in the past twelve months.
A recent report published by River, a Bitcoin financial services company, reveals that corporate adoption of Bitcoin is on the rise. As of August 18, 2024, companies hold 3.3% of the total bitcoin supply, equivalent to 683,332 BTC, marking a 587% increase compared to 2020. This growth has been driven by companies such as MicroStrategy, Tether, BitMEX, Xapo, and Block.one, which collectively own 82% of the corporate bitcoin holdings.
Growth of adoption in 2024
The report highlights that the number of publicly traded companies holding Bitcoin has increased by 40% over the past year. This rise has been supported by a clearer regulatory environment, thanks to updates in accounting standards by the Financial Accounting Standards Board (FASB), which will allow bitcoin to be valued on the balance sheet at market value.
Treasury asset and payment method
The primary use of Bitcoin by companies remains as a treasury reserve, with companies such as Block, Real Bedford F.C., and Tahini’s integrating Bitcoin into their operations to hedge against inflation and systemic risks in the traditional financial system, thus enhancing their resilience. According to the report, the adoption of Bitcoin as a payment method is also increasing, particularly for cross-border payments and international remittances.
The report estimates that companies will continue to invest in Bitcoin at a daily purchasing rate ranging from 204 to 519 BTC until 2026. According to River, within 18 months, approximately 10% of U.S. companies will invest 1.5% of their cash reserves in Bitcoin.
The document adds that companies prefer to hold “physical” bitcoins rather than exchange-traded products (ETFs), as the latter could classify them as investment companies, leading to regulatory hurdles.
“From a legal perspective, real bitcoin is classified as a commodity, whereas ETFs of any kind are classified as a security. Under the Investment Company Act of 1940, businesses that own securities making up more than 40% of their balance sheet assets are regulated as investment companies. For most businesses, being designated as an investment company introduces significant costs and reporting requirements.”
