Just a few years ago, a publicly traded company that wasn’t a cryptocurrency miner or Michael Saylor’s Strategy (NASDAQ: MSTR) holding bitcoin on its balance was close to unthinkable, but those attitudes are rapidly changing.
As has been widely documented, the universe of publicly traded firms deploying bitcoin as a treasury asset is expanding at breakneck speed and what’s notable about that is that the population includes much more than miners and issuers of exchange traded funds. Typically, ETF sponsors hold bitcoin because they issue spot bitcoin ETFs, meaning they’re buyers of the largest digital currency when market participants are buying those funds.
When it comes to bitcoin Treasury holdings, Strategy is the leader and it’s a crown that company is likely to wear that crown for some time having acquired 570,000 bitcoin (it’s buying more) since inception, but others are on the rise.
“We expect that over 1,000,000 BTC will be accumulated under this new accumulation paradigm by the end of 2026,” according to Bitwise. “We also expect the number of Bitcoin Treasury Companies to more than double by EOY 2026.”
In dollar terms, public companies could own $759.3 billion worth of bitcoin by the end of next year, or more than a third of the asset’s current market capitalization of $2.18 trillion.
Accounting Accommodations Open Door to Bitcoin Ownership
Changes in accounting rules are broadening the field of corporate bitcoin owners. Previously, companies that held the largest cryptocurrency on their books had to treat those holdings as intangible assets, but with ASU 2023-08, the Financial Accounting Standards Board (FASB) paved the way for corporate bitcoin holders to price the asset at fair market value.
“By allowing companies to ‘mark to market,’ the rule removes an accounting penalty that blocked them from benefitting when their Bitcoin holdings appreciated, and, as a result, incentivizes further treasury adoption,” notes Bitwise.
FASB guidelines pertain to US-based firms, but it’s worth pointing out that on a global basis, 113 public companies own some bitcoin and that group extends beyond miners and Strategy to include familiar names such as Tesla (NASDAQ: TSLA) and Block (NYSE: XYZ), among others. Point is corporate bitcoin adoption is perking and even if it just maintains its current pace, significant buying pressure would be at play.
“In the base case (1x), adoption continues at the current rate of 196,363 BTC per quarter. In the bull case (2x), the pace accelerates to 392,726 BTC per quarter,” observes Bitwise.
Examining the Field of Corporate Bitcoin Buyers
For some HODLers, simply knowing that bitcoin adoption among public companies is increasing is enough. For the more inquisitive, there are four primary groups in this realm, conveniently highlighted by Bitwise.
There are devotees or high-conviction allocators, such as Strategy. Those firms are long-term bitcoin bulls, betting on higher prices. Then there are the opportunistic players, including Block and Tesla. The other groups are firms embracing bitcoin as a macro hedge and those using it as an inflation hedge and/or protection against dollar weakness.
Specific to Strategy, that’s perhaps the most bitcoin-correlated stock on the market today and it’s surged a staggering 2,855% over the past five years as the company has used debt and equity sales to fund bitcoin purchases. That could be a playbook deployed by other publicly traded entities.