At the end of August, companies have accumulated 3% of the total amount of the main cryptocurrency. Experts predicted that in a few years this share will grow to 10%

According to the latest data, companies own almost 3% of the total number of bitcoins (21 million). At the end of August this year, they have accumulated 537 thousand bitcoins ($25.2 billion at the current exchange rate at 14: 00 Moscow time on August 26).

The first place in the list of the largest bitcoin owners among companies is occupied by MicroStrategy, which has accumulated almost 109 thousand digital coins ($5 billion at the current exchange rate on August 26). The last time MicroStrategy invested in bitcoin was on August 24.

The second and third places are occupied by Tesla and Square, respectively. The automaker announced the purchase of bitcoin in February of this year. As of August 26, Tesla owns 43.2 thousand bitcoins ($2 billion).

Square invested in bitcoin in February 2021 and October 2020. The payment company of Twitter founder Jack Dorsey owns 8 thousand digital coins ($374 million). In early May, Square published a financial report on the results of the first quarter of 2021, according to which the income from investments in bitcoin amounted to $3.5 billion.
Will the share of companies in the crypto market grow?

Taking into account the lost or inaccessible bitcoins, companies currently own about 3.75% of the total bitcoin issue, says Nikita Soshnikov, director of the Alfacash cryptocurrency exchange service. According to him, this is a small amount, but it is enough to talk about the interest of the corporate sector in the cryptocurrency market.

“Interest is shown not only in direct ownership of bitcoin, but also in derivative instruments — futures, investments in cryptocurrency companies. And here the positions of institutional investors are stronger than in the market of cryptocurrencies themselves, ” the expert noted.

On August 25, it became known that the banking giant Citigroup is waiting for the approval of financial regulators to start trading bitcoin futures on the Chicago Mercantile Exchange (CME). Large American banks are actively entering the crypto market. In mid-July, it became known that some Bank of America customers had access to bitcoin futures trading. And in June, Goldman Sachs entered into a partnership with Galaxy Digital to increase the volume of trading in cryptocurrency futures.

At the end of 2017, CME Group released bitcoin futures. Immediately after that, the price of the main digital coin and altcoins began to fall and moved into a long-term decline phase that lasted for more than a year. At the end of 2020, CME Group launched trading in Ethereum futures. The coin became the first altcoin traded on the stock exchange.

Institutional investors also invest in cryptocurrency companies. For example, the investment company ARK Investment Management in April acquired shares of the cryptocurrency exchange Coinbase in the amount of $246 million after their listing on the NASDAQ stock market and added securities to three of its own exchange-traded funds.

Now it is more correct to talk about the progressive exit of institutions to the crypto market, Soshnikov is sure. In his opinion, this is just the beginning of their journey in the world of digital assets.

“It is obvious that their presence on the crypto market will only grow over the years,” the expert added.

We should not expect a mass influx of institutional investors into the crypto market until 2023, Soshnikov believes. He claims that it is in 2023 that a powerful jump in bitcoin prices will occur on the eve of the halving of 2024.

Halving is a twofold reduction in the reward for the extracted block, which occurs once every four years. Initially, miners received 50 bitcoins, in 2012 this number decreased to 25 coins, in 2016 — to 12.5. On May 11, 2020, it decreased to 6.25 bitcoins. Halving occurs every 210 thousand extracted blocks. The next halving is scheduled for 2024.
Market development

Taking into account all the regulatory difficulties and uncertainties regarding the cryptocurrency, the investments of large companies even in the amount of 3% of the issue seem serious, says Viktor Pershikov, a leading analyst at 8848 Invest. He recalled that even 3-5 years ago, the participation of institutional participants and classic business, the crypto market, dispersed by retail participants, could only dream of, whereas now the purchase of digital assets on the balance sheet or the adoption of cryptocurrency as a means of payment by one or another company is no longer news.

This trend will continue in the conditions of inflationary risks, businesses will look for protective investments for their assets, and now cryptocurrencies fully satisfy this, the analyst believes. Probably, in the next 1-2 years, the company’s volume will triple investments in bitcoin, Pershikov predicted.

Purchases of institutions set trends, and do not follow them, so it is unlikely that the business will behave like retail participants and run after the price increase, the analyst is sure. According to his observations, over the past couple of years, large purchases of bitcoin occur before the beginning of bullish movements, and not after they took place.

“As part of the correction to the levels of $45-40 thousand, which is possible in the near future, we will hear new names of companies that have invested in bitcoin, after which the asset may rush to its historical highs,” Pershikov predicted.

The arrival of institutions on the crypto market contributes to its greater stability and predictability, explained Artem Deev, head of the analytical department of AMarkets. He agreed that in the future, large companies will begin to acquire bitcoin more actively in the hope of obtaining additional profits.

Leave a Reply

Your email address will not be published. Required fields are marked *