Corporate adoption of bitcoin has experienced a significant surge in 2024, according to a recent report from River, a U.S.-based bitcoin-focused financial services company. The report highlights the growing role of bitcoin in business treasuries, offering insights into key trends and future projections.

Corporate Interest in Bitcoin Spikes, U.S. Companies Dominate Holdings

River’s report indicates that as of August 2024, businesses collectively hold 683,332 bitcoin (BTC), which represents 3.3% of the total bitcoin supply. This marks an impressive 587% growth in corporate holdings since 2020, with a 30% increase over the past year. The report also reveals that U.S.-domiciled companies account for 49.3% of these holdings, representing $19.7 billion.

Among the largest holders, Microstrategy and Tether dominate, collectively accounting for 85% of corporate bitcoin purchases in the first half of 2024. The report emphasizes that business adoption of bitcoin has accelerated dramatically over the past year. Publicly traded companies with bitcoin holdings have grown by 40% from September 2023 to August 2024.

River forecasts a continuation of this trend, estimating that business bitcoin holdings will increase by between 204 and 519 BTC daily until 2026. Additionally, the report notes that businesses favor holding real bitcoin over exchange-traded funds (ETFs), as the latter could classify them as investment companies, imposing regulatory hurdles.

“From a legal perspective, real bitcoin is classified as a commodity, whereas ETFs of any kind are classified as a security,” River’s report states. “Under the Investment Company Act of 1940, businesses that own securities making up more than 40% of their balance sheet assets are regulated as investment companies. For most businesses, being designated as an investment company introduces significant costs and reporting requirements.

River’s report adds:

Therefore, most businesses with bitcoin exposure prefer to hold real bitcoin instead of bitcoin ETFs.

River’s insights come from its growing client base, which has seen a 68% increase in the number of businesses served since August 2023. Notably, 70% of these companies have never sold any bitcoin after acquiring it, viewing it as a long-term asset. Despite initial concerns about accounting and tax implications, 95% of surveyed clients indicated plans to expand their bitcoin holdings.

This shows a strong conviction among businesses to incorporate bitcoin into their financial strategies, driven by its potential to hedge against inflation and diversify treasuries. The report also highlights successful case studies of companies integrating bitcoin into their operations.

For example, the homebuilder Summerplace Homes uses bitcoin as a hedge against cyclical downturns, while Real Bedford F.C. has leveraged bitcoin as both a treasury asset and a core element of its brand identity, resulting in increased revenues and a growing fanbase. River concludes that while bitcoin adoption as a treasury asset has not yet gone mainstream, the potential for strategic advantages and financial security is driving more businesses to explore this avenue.

Source : Bitcoin News - Sep 8, 2024