5 Companies Investing Big in Bitcoin
Despite getting off to a rocky start in 2020, Bitcoin went on to make one of the biggest asset comebacks of all time. By the end of the year, the world’s most popular cryptocurrency had almost quadrupled in value, rallying to over $28,000 and proving itself to be one of the most resilient asset classes with the power to compete with gold. So much for billionaire investor Warren Buffett’s proclamation that bitcoin has “no value.”
As bitcoin continues to grow in value and gain market stability, more and more world-leading corporations are investing big in crypto. There are whispers that corporate giants such as Amazon and Apple are beginning to consider their entry into crypto. Even financial titans like JP Morgan and Goldman Sachs, who have long dismissed cryptocurrencies as a risky fad, are being forced to reckon with the demand for bitcoin as a new wave of FinTech competitors continue to upend the traditional banking industry.
2021 is already proving to be another milestone year for digital gold. Here’s a rundown of five of the biggest companies who are setting the course for bitcoin’s widespread adoption in the business world.
Despite being the polymath tech mogul who founded the online bank that morphed into PayPal, Tesla head honcho Elon Musk remained shtum on bitcoin for many years. In fact, the most he’d ever really said about the world’s most popular digital currency was that he was “neither here nor there on Bitcoin.” Musk suddenly turned face in early 2021 when he came out as “a supporter of bitcoin”, which helped the currency surge to new heights.
Eyebrows were raised further when a few weeks later Musk’s electric vehicle and clean energy company Tesla announced it had bought $1.5 billion worth of Bitcoin. The company said it bought the cryptocurrency for “more flexibility to further diversify and maximize returns on our cash”. The company also announced it would start accepting bitcoin payments in exchange for its products. The investment paid dividends. A mere few weeks later, Tesla had made roughly $1 billion in profits from its investment into bitcoin.
One of the biggest players in the bitcoin space continues to be New York-based Grayscale, the world’s largest cryptocurrency asset management firm. Over the past few years Grayscale has bucked trends and invested heavily into the digital currency, accumulating over 650,000 BTC, which are worth in excess of $20 billion. Grayscale operates Bitcoin Trust, which has fast become one of the simplest ways for investors to gain exposure to the cryptocurrency without owning the coins themselves. Commenting on Tesla’s entry into crypto, Grayscale CEO Michael Sonnenshein expressed his belief that more large corporations will follow Tesla’s direction and invest in Bitcoin. “You’re going to see a lot of other visionary leaders and disruptive companies actually realizing it has really moved from why to why not,” he said.
Square, Inc – an American financial services company run by vocal bitcoin advocate and Twitter CEO Jack Dorsey – made headlines in October 2020 when they announced they had purchased 4,709 BTC at an aggregate price of $50 million. Square’s CFO, Amrita Ahuja explained that the company “believe[s] that Bitcoin has the potential to be a more ubiquitous currency in the future. For a company that is building products based on a more inclusive future, this investment is a step on that journey.” In 2021, the company doubled down on its initial investment, announcing it had bought a further $170 million worth of the digital currency.
Bitcoin received another huge endorsement from one of the world’s largest business intelligence companies, MicroStrategy. As of February 2021, the company run by bitcoin evangelist Michael Saylor, has invested over $2 billion to acquire approximately 90,531 bitcoins. Despite the continued volatility in bitcoin’s market price, Saylor went so far as to announce on CNBC that he sees bitcoin’s market value reaching $100 trillion one day, predicting a 100-times increase. “As it marches toward $100 trillion, you’re going to see the growth rates fall, the volatility fall, and it’s going to be a stabilizing influence in the entire financial system of the 21st century,” he explained. MicroStrategy has already announced its intention continue to pursue a strategy of acquiring bitcoin.
In the wake of MicroStrategy’s foray into the world of bitcoin, many other companies have been warming to the idea of investing in crypto. One such company is Canadian FinTech firm Mogo, who in December of 2020, announced its plans to make a corporate investment of $1.5 million in bitcoin. The initial purchase represented approximately 1.5% of Mogo’s total assets at the end of the third quarter of 2020. The FinTech firm is better positioned than most to capitalize on the demand for Bitcoin as it boasts its own crypto trading platform. Company president and CFO Greg Feller explained that the Mogo team “believes bitcoin represents an attractive investment for our shareholders with significant long-term potential as its adoption continues to grow globally.”