Public Companies Bought More Bitcoin in 2021 Than 2020

Institutional investment is always a boost for the crypto industry. It was one of the primary drivers of the growth seen in 2020, thanks to companies like Block (formerly Square) and MicroStrategy putting billions in the market.

Public Companies Bought More Bitcoin in 2021 Than 2020

With a relatively uncertain economic climate in 2021, public companies did more Bitcoin investing, and many of them benefitted nicely.

Bitcoin Effectively Enters Wall Street

Earlier this month, Willy Woo, a popular on-chain crypto analyst, shared a tweet claiming that public companies holding Bitcoin gained market share from spot exchange-traded funds (ETFs).

Woo referenced a chart showing Bitcoin holdings inside ETFs and the treasuries of public companies, all available for public ownership through equity markets.

The data showed that Grayscale Investments - the crypto industry's largest asset management firm - gained the biggest market share with its holding of 645,199 BTC by the close of 2021 - enough to take up about 71 percent of the broader market, holdings of all corporations and spot ETFs totaling 903,988 BTC.

Besides ETF and equity markets data, more public companies joined the crypto market in 2021. MicroStrategy continued to lead the charge, the Virginia-based business intelligence company pouring billions into Bitcoin at different intervals.

According to data from Bitcoin Treasuries, MicroStrategy is the leader among public companies holding Bitcoin. According to current prices, the company currently holds 124,391 BTC, worth $5.3 billion. It's followed by auto manufacturer Tesla, which has 42,902 valued at $1.8 billion.

Galaxy Digital Holdings (16,400 BTC, $700 million), Voyager Digital Limited (12,260 BTC, $523 million), and Marathon Digital Holdings (8,133 BTC, $347 million) make up the rest of the top five.

These numbers are a far cry from 2020, when public companies only held about $3.6 billion in Bitcoin. Market prices have since changed. There are several newcomers. Voyager Digital held Bitcoin for a long time, but the company only started trading on the Toronto Stock Exchange in September 2021. The same can be said about Coinbase, debuting on the Nasdaq early last year.

Several other companies went public last year after holding Bitcoin for a while.

IPO Watch for 2022 Means Treasuries Will Grow

With 2022 now underway, there is little doubt that the number of public companies holding Bitcoin - as well as the number of Bitcoin held by public companies - will increase.

Already, several top crypto firms are looking at the possibility of public debuts. Last year, reports confirmed that Binance was considering a public debut for its Binance US subsidiary - following a similar move made by Coinbase at the time. Kraken, another top exchange, is also buzzing with talk of an initial public offering (IPO).

Crypto exchanges are known to hold Bitcoin as part of the broader financial planning strategy. If more continue to go public, Bitcoin treasuries will increase.

Inflation Fears Could Accelerate the Crypto Push

Besides crypto companies going public, traditional firms may also look to add Bitcoin to their portfolios. One of the most significant economic trends is the fear of inflation. The Federal Reserve is doing all it can to balance the markets and keep the American economy growing.

The economy is currently dealing with the fallout from the coronavirus pandemic, where governments printed billions of dollars and sent them out to citizens in the form of aid and stimulus checks. Now, the American economy is dealing with its highest inflation rate in four decades. The Consumer Price Index has also ballooned.

With all of this, investors and companies are running scared, and many could be turning to crypto.

Several prominent investors are advising people to do just this. Ray Dalio, whose Bridgewater Associates hedge fund holds over $150 billion in assets under management, urged investors to devote a small portion of their portfolios to cryptocurrencies as cash is currently the worst investment amid inflation fears.

Thomas Peterffy, a billionaire investor, told Bloomberg recently that investors should allocate 2 to 3 percent of their portfolios to crypto.


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