Emily Walker
In a recent memo released on January 13, 2025, Matt Hougan, the Chief Investment Officer (CIO) of Bitwise, asserts that the trend of businesses acquiring Bitcoin for their reserves is more prevalent and impactful than many investors might think. He suggests, “We anticipate that hundreds of companies will start accumulating Bitcoin in the next 12-18 months, and these acquisitions will significantly boost the Bitcoin market.”
In his memo, titled “Companies Buying Bitcoin: An Overlooked Megatrend,” Hougan highlights that MicroStrategy, led by its prominent CEO Michael Saylor, frequently gains attention; however, they represent just the tip of the iceberg in a growing corporate trend towards Bitcoin investment.
MicroStrategy may be positioned at number 220 in global market capitalization—comparable to Chipotle, yet smaller than Sherwin-Williams—but its Bitcoin acquisitions have far surpassed the new Bitcoin supply mined in the previous year.
“In 2024, MicroStrategy acquired approximately 257,000 BTC, exceeding the total new Bitcoin mined, which was 218,829 BTC,” Hougan noted. He also mentioned that MicroStrategy plans to raise over $42 billion for further Bitcoin purchases, roughly equal to “about 2.6 years’ worth of new supply” based on current mining rates.
Hougan raises the question of what would occur if “large companies began to emulate MicroStrategy,” alluding specifically to Meta, which he describes as “20 times larger than MicroStrategy.”
While MicroStrategy has attracted significant attention, Hougan emphasizes that many other businesses are already incorporating Bitcoin into their financial statements. He reports that “70 publicly traded companies hold Bitcoin on their balance sheets,” which includes both crypto-focused companies like Coinbase and Marathon Digital, as well as established brands like Block, Tesla, Semler Scientific, and Mercado Libre.
Excluding MicroStrategy, these firms together possess 141,302 BTC. Private companies are also significant holders of Bitcoin, with private entities such as SpaceX and Block.one together owning at least 368,043 BTC. “That’s noteworthy. It indicates that MicroStrategy represents less than 50% of the corporate BTC market,” he states, predicting that MicroStrategy’s share will decrease over time.
The Surge in Corporate Bitcoin Adoption
Hougan identifies two significant factors that have traditionally limited corporate Bitcoin adoption: reputational risks and challenging accounting practices—and he explains why these challenges have been rapidly changing.
“Last year, a CEO of a significant publicly traded company encountered substantial obstacles in incorporating Bitcoin as a treasury asset,” he reflects, citing fears of negative media coverage, potential shareholder lawsuits, and regulatory scrutiny. “However, reputational risks have markedly decreased in recent months. With the post-election environment embracing crypto at high levels, owning Bitcoin is becoming more acceptable and favorable.”
He further details an important update from the Financial Accounting Standards Board (FASB) through a guideline called ASU 2023-08. Previously, Bitcoin was categorized as an “intangible asset” requiring impairment testing, which forced companies to decrease the book value of their Bitcoin during price drops but prohibited them from increasing it when prices rose. Now, they can assess Bitcoin’s value in real-time, allowing them to recognize profits when its price appreciates.
“If 70 companies were willing to add Bitcoin to their financials when it could literally only lose value, imagine how many will consider it now,” Hougan posits. “Will it be two hundred? Five hundred? A thousand?”
Addressing doubts about the motivations companies have for holding Bitcoin, Hougan argues that their reasons are similar to those of individual investors. “Some companies seek profit… Others fear the depreciation of the dollar… Some wish to demonstrate affinity with the Bitcoin community… And some may just have a gut feeling,” he explains.
Nevertheless, Hougan asserts that the specific motivations of each company matter less than the overall surge in demand. “You simply need to analyze the figures and ask two key questions: What is driving this demand from corporates, and how might it affect the market?”
In conclusion, Hougan expresses an optimistic outlook, indicating that if more large corporations follow the example set by MicroStrategy—now equipped with more favorable reputational and accounting conditions—the wave of corporate investment could lead to a significant rise in Bitcoin’s value over the next year.
“My prediction: We’ll witness hundreds of companies acquiring Bitcoin for their treasuries within the next 12-18 months.” – Matt Hougan, Bitwise CIO
As of now, BTC is trading at $95,039.