Companies with bitcoin on their balance sheets have recorded massive losses following the crash. These companies which have gradually added BTC to their holdings had made a profit into the billions when the price of the cryptocurrency was surging. However, since the downtrend that caused bitcoin to lost about 50% of its value, they have now seen billions shaved off their balance sheets collectively.
$7 Billion Loss For Companies
Publicly traded companies have carefully but surely increased their bitcoin holdings over time. By August 2021, it was reported that institutional investors held nearly 10% of the total BTC supply. Given that the supply of BTC is limited, this volume is significant, especially when institutional entrance into the market is still in its infancy.
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As the price of BTC had climbed, so had the value of the BTC the companies held. At some point reaching almost as high as 100% returns for some and surpasses that for others. But like with any market, an uptrend cannot last forever and with the crash that rocked the market late last year, institutional investors are seeing the value of their holdings dwindle.
From November 2021 to January 2022, publicly traded companies with bitcoin on their balance sheets have lost nearly $7 billion from their BTC holdings. Much of this lost value was recorded by the top players in the space, MicroStrategy, Tesla, Galaxy Digital, and Block.
The decline in value has not shaken any of the companies’ belief in the digital asset, however. Most remain committed to holding bitcoin for the long-term and others like MicroStrategy have said that they would continue to purchase BTC going forward.
Companies Getting Bullish On Bitcoin
Some of the companies which hold bitcoin on their balance sheet are known to the general public. Others are much lesser-known but still hold significant amounts of bitcoin in their balance sheets. These include publicly traded companies like MicroStrategy, Tesla, Galaxy Digital, Jack Dorsey’s Block (formerly Square), among others.
BTC recovers to $37K | Source: BTCUSD on TradingView.com
Over the years, these companies have taken a more positive outlook on BTC, opting to invest in the digital asset over others as in the case of MicroStrategy. These companies have one thing in common, however, and that is bitcoin maximalists at their helm.
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MicroStrategy, the publicly traded company with the largest BTC holdings in the world, is headed by Michael Saylor, a well-known BTC bull. Saylor himself has said he owns BTC personally, well before his company did, using his own returns as evidence for why the digital asset was a good bet.
The publicly-traded company with the second-largest bitcoin holdings is Tesla. Now, Tesla is headed by billionaire Elon Musk. Musk has never been one to hide his affinity for BTC and other cryptocurrencies. So it came as no surprise when the automaker revealed it held BTC on its balance sheet.
Galaxy Digital and Block are headed by bitcoin maximalists Mike Novogratz and Jack Dorsey. These companies rank third and fourth as the companies with the largest bitcoin holdings in the world. These top four companies hold almost 200K BTC between them, totaling approximately $6.9 billion at current prices.
Featured image from Forbes, chart from TradingView.com