Canadian investment bank Canaccord Genuity stated that the listing of a Bitcoin ETF has stimulated the market’s demand for spot Bitcoin, and more companies may follow MicroStrategy’s lead and include Bitcoin in their balance sheets.
(Previous Summary:
Following MicroStrategy’s lead, Japanese company Metaplanet promises to buy 1 billion yen worth of Bitcoin, causing its stock price to surge by 89%.)
(Background:
Following MicroStrategy’s Bitcoin buying frenzy, Coinbase issues $1.1 billion convertible bonds, and its stock price has surged by 60% this year.)
Table of Contents:
More companies may follow MicroStrategy’s lead and reserve Bitcoin
MicroStrategy’s stock price has increased more than 7 times in five years
MicroStrategy’s Bitcoin holdings have a floating profit of 5.806 billion
If there is a wave of Bitcoin purchases by companies, how much incremental capital would it bring?
Canadian investment bank Canaccord Genuity, led by analyst Joseph Vafi, stated at the 2024 Digital Assets Seminar held last week that the listing of a Bitcoin spot ETF in January this year, approved by the US SEC, has also driven investment demand for spot BTC in the market.
More companies may follow MicroStrategy’s lead and reserve Bitcoin
Canaccord Genuity further pointed out that the impact of the Bitcoin spot ETF will continue to expand in the next few months. Some institutions, including certain sovereign funds, may have already invested in Bitcoin. Official reports from such investors may be made public soon.
Furthermore, according to the new FASB accounting standards, coupled with high inflation, more companies may imitate MicroStrategy and add Bitcoin to their balance sheets as a reserve asset.
Samir Kerbage, Chief Investment Officer of Hashdex, also believes that the influence of the Bitcoin spot ETF will continue to grow.
Further Reading:
Following MicroStrategy’s lead, Japanese company Metaplanet promises to buy 1 billion yen worth of Bitcoin, causing its stock price to surge by 89%.
MicroStrategy’s stock price has increased more than 7 times in five years.
MicroStrategy, the dominant holder of Bitcoin among US listed companies, was founded in 1989 as a technology company providing data analysis, software development, and cloud computing. However, its revenue performance was not particularly outstanding in recent years. It wasn’t until August 2020 when MicroStrategy announced its continued investment in Bitcoin that its stock price began to skyrocket.
According to Google Finance, MicroStrategy’s stock price has surged from $140 to the current $1,270 in the past five years, an increase of nearly 750%. Two periods of high growth also corresponded to Bitcoin bull markets, one in 2021 and the other this year.
Image Source: Google Finance
MicroStrategy’s Bitcoin holdings have a floating profit of $5.806 billion.
According to current data from bitcointreasuries, MicroStrategy has spent $7.533 billion to purchase 214,246 Bitcoins. When the Bitcoin price broke through $70,000 again last week, the highest floating profit in its account reached $7.647 billion.
Although the Bitcoin price has experienced a correction, it still holds an unrealized profit of $5.806 billion.
Image Source: bitcointreasuries
With the successful example of MicroStrategy, Japanese company Metaplanet announced this month that it will invest 1 billion yen to buy Bitcoin. Let’s imagine how much capital would be injected into the cryptocurrency market if companies were to start a wave of Bitcoin purchases.
Based on the current $51 trillion market value of the US stock market, if each company were to use 1% of its market value to purchase Bitcoin, it would mean an additional $510 billion of capital entering the market. It is worth noting that the total market value of Bitcoin is currently only $1.22 trillion, which is enough to drive the price of Bitcoin to the next level.
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