A new report suggests that US companies are expected to purchase $10.3 billion worth of Bitcoin over the next 18 months. This shift is part of a growing trend in corporate treasury strategies, with companies looking for better ways to preserve their wealth amid inflation concerns.
Some of the criticisms made by River analysts included that conventional corporate treasury management focused on cash and cash-like instruments lose value in the long run. Still, such investments can guarantee a return equal to the federal funds rate above 5%, yet they offer less than inflation. Therefore, corporate treasuries, valuable organizational assets, can be substantially devalued.
It also noted that this has remained a problem, not even sparing the biggest companies such as Apple. Apple has lost about $15bn as inflation has reduced the value of treasury holdings over the past ten years.
MicroStrategy Holds 226,500 BTC, Valued at $14.7 Billion in Q2 2024
The process of Bitcoin becoming a corporate treasury asset is primarily associated with Michael Saylor, the head of MicroStrategy. Saylor gave a strategy of using Bitcoin to hedge against inflation and has referred to it as a path of economic immortality because of its fixed supply and low risk compared to other traditional assets such as real estate and equities.
For example, in June 2024, MicroStrategy issued debt securities of $800 million to purchase an additional 11,931 BTC, which also confirms the company’s strong belief in this strategy. In Q2 2024, MicroStrategy owned 226,500 BTC, equivalent to 14.7 billion US dollars.
MicroStrategy has implemented this strategy well, as shown by its performance. After the company decided to use Bitcoin as its primary treasury reserve, its share went up by over 1,000%, while that of Berkshire Hathaway remained at 104.75%.
