FameEX Hot Topics | Sharp Increase in Corporate Bitcoin Adoption in 2024

Corporate adoption of Bitcoin has surged in 2024, as highlighted in a report from River, a U.S.-based financial services company specializing in Bitcoin. The report underscores the increasing trend of businesses incorporating Bitcoin into their treasuries and projects that this trend will continue. The findings focus on key data, trends, and future forecasts, demonstrating Bitcoin's expanding role in corporate financial strategies.

As of August 2024, businesses collectively hold 683,332 Bitcoin (BTC), representing 3.3% of the total Bitcoin supply. This marks a remarkable 587% increase in corporate Bitcoin holdings since 2020, with a 30% rise in just the last year. U.S.-based companies account for 49.3% of these holdings, which amounts to $19.7 billion. Leading corporations such as Microstrategy and Tether dominate the corporate Bitcoin market, collectively making up 85% of Bitcoin purchases by businesses in the first half of 2024.

The report also reveals that the number of publicly traded companies holding Bitcoin increased by 40% between September 2023 and August 2024. River predicts that business Bitcoin holdings will grow by 204 to 519 BTC per day through 2026. Notably, companies prefer holding actual Bitcoin over exchange-traded funds (ETFs) due to regulatory concerns. ETFs could classify a company as an investment company, triggering additional compliance requirements under the Investment Company Act of 1940.

The legal distinction between Bitcoin and ETFs is critical. While Bitcoin is classified as a commodity, ETFs are considered securities. This distinction can subject companies with significant securities holdings to investment company regulations, leading to greater scrutiny and increased costs. River’s findings show that businesses prefer to avoid these complications by holding real Bitcoin instead, thus simplifying their operations and reducing expenses.

River’s client base has expanded by 68% since August 2023. Of those businesses, 70% have retained all their Bitcoin holdings, viewing the cryptocurrency as a long-term asset. Despite concerns over accounting and tax implications, 95% of River's clients plan to increase their Bitcoin holdings, reflecting growing confidence in Bitcoin’s potential. Many businesses see Bitcoin as a hedge against inflation and a tool for diversifying their financial portfolios.

The report also highlights successful case studies of companies adopting Bitcoin. For example, Summerplace Homes uses Bitcoin to manage risks associated with cyclical downturns, while Real Bedford F.C. has embraced Bitcoin as both a treasury asset and a key part of its brand identity, resulting in increased revenue and fanbase growth. River concludes that while Bitcoin adoption in corporate treasuries is not yet widespread, its potential for strategic and financial benefits is driving more companies to explore this avenue.

Disclaimer: The information provided in this section is for informational purposes only, doesn't represent any investment advice or FameEX's official view.