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.

A recent report by River, a U.S.-based bitcoin-focused financial services company, sheds light on the increasing adoption of bitcoin by corporations in 2024. The report analyzes key trends, provides insights into the role of bitcoin in business treasuries, and offers projections for the future.

According to the report, as of August 2024, businesses collectively hold 683,332 bitcoin (BTC), which comprises 3.3% of the total bitcoin supply. This reflects a significant growth of 587% in corporate holdings since 2020, and a 30% increase over the past year. Notably, U.S.-domiciled companies account for 49.3% of these holdings, amounting to $19.7 billion.

Among the largest holders, Microstrategy and Tether are at the forefront, collectively accounting for 85% of corporate bitcoin purchases in the first half of 2024. The report highlights a dramatic acceleration in business adoption of bitcoin over the past year, with publicly traded companies increasing their bitcoin holdings 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. Furthermore, the report indicates that businesses generally prefer to hold real bitcoin over exchange-traded funds (ETFs), as the classification of ETFs as investment companies could subject them to regulatory hurdles.

“From a legal perspective, real bitcoin is classified as a commodity, whereas ETFs of any kind are classified as a security,” the 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.”

“Therefore, most businesses with bitcoin exposure prefer to hold real bitcoin instead of bitcoin ETFs,” the report adds.

River's analysis is based on its growing client base, which has seen a 68% increase in the number of businesses served since August 2023. Interestingly, 70% of these companies have never sold any bitcoin after acquiring it, treating it as a long-term asset. Despite initial concerns, 95% of surveyed clients indicated plans to expand their bitcoin holdings, showing a strong conviction to integrate bitcoin in their financial strategies, driven by its potential to hedge against inflation and diversify treasuries.

The report also showcases successful case studies of companies integrating bitcoin into their operations. For instance, the homebuilder Summerplace Homes utilizes bitcoin as a hedge against cyclical downturns, while Real Bedford F.C. has employed bitcoin as both a treasury asset and a core element of its brand identity, leading to increased revenues and a growing fanbase. While the adoption of bitcoin as a treasury asset has not yet become mainstream, the report concludes that the potential for strategic advantages and financial security is driving more businesses to explore this avenue, according to River.

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