Analysts Point Out That By 2030, One-Quarter of S&P 500 Companies May Incorporate Bitcoin Into Their Balance Sheets, As Investment Pressure on Corporate Executives Continues to Rise.
(Background: U.S. stocks experienced a “Black Friday,” with cryptocurrency-related stocks heavily affected; MicroStrategy plummeted 10%; Bitcoin may drop to $72,000?)
(Context: U.S. February PCE shows “inflation heating up,” Fed rate cuts may be delayed, U.S. stocks broadly closed in the red, Bitcoin barely held above $84,000)
According to observations by Elliot Chun, a partner at technology financial consulting firm Architect Partners, he believes that by 2030, approximately one-quarter of companies in the S&P 500 index may hold a certain amount of Bitcoin as a long-term financial asset. He believes the key driving factor behind corporate investments in Bitcoin is the risk that financial executives face regarding missing out on investment opportunities.
Elliot pointed out:
“If you try to invest in Bitcoin and succeed, the market will see you as a genius; if you fail, at least you had the courage to try. But if you take no action at all without a good reason, your position may face significant risks.”
MicroStrategy Sparks Bitcoin Reserve Trend
Currently, according to data from BitcoinTreasuries.NET, nearly 90 publicly traded companies hold Bitcoin, with MicroStrategy (MSTR) possessing the most. Since its first purchase in August 2020, MicroStrategy has accumulated over 500,000 Bitcoins, and its stock price has increased by more than 2000% since the initial Bitcoin investment, far exceeding the overall performance of Bitcoin and the S&P 500 index during the same period.
Nevertheless, Elliot warns that if other companies simply hope to replicate MicroStrategy’s performance, they may face disappointment. “MicroStrategy’s strategy is strong but unique, making it difficult to replicate. They provide an important and special role by offering alternative exposure channels for companies and U.S. asset management institutions when the market cannot directly invest in Bitcoin.”
As of now, only Tesla and Block, the blockchain payment company founded by Jack Dorsey, hold Bitcoin among S&P 500 listed companies. To achieve Elliot’s predicted “one-quarter ratio” (about 125 companies), 123 more companies need to follow Bitcoin’s lead within the next five years.
Digital Gold Drives Financial Innovation, Will Bitcoin Gradually Replace Gold’s Status?
Elliot further believes that from the perspective of financial asset management, Bitcoin’s convenience, ease of storage, and flexibility as a digital asset far surpass traditional physical investments in gold. Additionally, Bitcoin has been recognized by U.S. GAAP (Generally Accepted Accounting Principles) as a liquid physical asset that can be included in a company’s balance sheet, further encouraging companies to actively consider adopting Bitcoin as a more flexible financial management tool.
On March 11 of this year, cryptocurrency asset management company Bitwise launched the “Bitwise Bitcoin Standard Corporate ETF,” which primarily tracks companies that hold at least 1,000 Bitcoins in their financials. This innovative investment product may further attract the attention of traditional companies, emerging tech firms, and asset managers, reflecting a clear trend in the market where companies are gradually shifting towards a more mainstream approach to holding Bitcoin.
Despite this, the effectiveness of companies using Bitcoin as an inflation hedge and risk management strategy remains an “unproven” model, and while pursuing potential profits, companies must also carefully assess the associated financial risks.
