Michael Saylor really wants corporations to follow suit and add bitcoin to their balance sheets. At the beginning of 2021, he held a seminar on this topic and stated that his audience is 1,400 firms.
A year later, corporations don’t seem to be as interested. According to the public company tracker CoinGecko, there aren’t many new organizations that have added cryptocurrency to their balance sheets in the past year. The only small crypto or payment firm that has one is Tesla. Square has BTC because it allows its customers to trade crypto, while several game developers have it as part of the Web 3 gaming push or because they accept crypto as a payment method.
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Taylor continues to add the asset to MicroStrategy’s balance sheet, saying in a recent note to investors, “The adoption of Bitcoin as our primary treasury reserve asset sets us apart from conventional competitors and has enhanced our brand.” But he just can’t convince others to do the same. For listed firms, bitcoin is notoriously difficult to deal with from an accounting standpoint. The narrative that the value of bitcoin would reach all-time highs due to corporate belief in it simply did not materialize.
But Terra intervened with its frequent bitcoin purchases, which pushed the Luna Foundation Guard (LFG) bitcoin holdings to almost $1.7 billion, with founder Do Kwon expressing a desire for that number to reach $10 billion. The current amount makes Terra/LFG the second-largest corporate holder below MicroStrategy’s $3.9 billion. Does the market care about this narrative? Not really. The correlation between LFG bitcoin purchases and the price of bitcoin is weakening; the last few purchases have not stopped bitcoin from falling.
Cryptoquant data suggests that institutional interest in crypto is still strong, but hedge funds, family offices, and high net worth individuals are not listed corporations. They will have a different investment thesis and pace than what Saylor prescribed for corporations. LFG’s mandate to buy crypto is also different from what a listed firm would do, and it’s important to look at the scale of HODLing as well as the pace. But LFG is not a Fortune 500 so the market is not applying the same prestige to buying as bitcoin continues to correlate with stocks and depreciation.