Bitwise CIO says corporate Bitcoin buying is set to explode

Key Takeaways

• Bitwise CIO Matt Hougan views corporate Bitcoin purchases as a megatrend.
• New accounting standards are encouraging more companies to add Bitcoin to their balance sheets.

Matt Hougan, Bitwise Chief Investment Officer, predicted in a client note on Tuesday that hundreds of companies will buy Bitcoin for their treasuries over the next 12 to 18 months.

He added that these purchases could lift the entire Bitcoin market substantially higher, describing this shift as a bona fide megatrend.

Hougan noted that MicroStrategy’s aggressive Bitcoin acquisition strategy has been overlooked by many investors, yet it is not the only company driving this trend.

According to Hougan, investors he has spoken to often view the company as a one-off, “a singular entity with a singular founder pursuing a singular strategy.”

In this context, MicroStrategy has emerged as a leading corporate buyer, acquiring over 257,000 BTC in 2024—surpassing the total new supply mined during the year.

The company plans to raise over $42 billion for additional Bitcoin purchases, potentially absorbing several years’ worth of supply at current prices.

Hougan emphasizes that while MicroStrategy receives much of the attention, it represents only a small fraction of the corporate Bitcoin market.

He emphasized that even before the anticipated surge in companies adding Bitcoin to their balance sheets, seventy public firms, including Tesla, Block, and Coinbase, already collectively hold 141,302 BTC.

Private entities like SpaceX and Block.one maintain an additional 368,043 BTC.

The trend is driven by reduced reputational risks and new accounting standards.

One key change is the Financial Accounting Standards Board’s ASU 2023-08, introduced in December. This new rule allows companies to mark Bitcoin holdings to market value.

It replaces the previous requirement, which treated Bitcoin as an intangible asset and only permitted downward price adjustments.

This accounting shift eliminates a significant barrier and makes Bitcoin more appealing to corporate treasuries.

Companies like Meta are already considering proposals to allocate Bitcoin. Hougan believes adoption will snowball as more firms begin to embrace the digital asset.

Hougan noted that companies are driven by various factors.

These include the desire for financial gain, the need to protect against currency devaluation, and the intention to align with the principles of Bitcoin. He highlighted that these motivations are similar to those of individual investors.

Bitcoin’s price shows a strong rebound after dropping below $90K yesterday.

Trading at $95.5K at press time, it is up 4.5% in the past 24 hours, with the total crypto market cap rising 2%.