Why Corporations Believe Crypto Is a Viable Reserve Asset, Too

In March, President Donald Trump announced the United States will launch a Strategic Bitcoin Reserve that explores tax-neutral ways to acquire more bitcoin while holding the almost $18 billion in bitcoin the US Treasury already owns.

Despite being a bipartisan proposal, the move was quickly politicized and criticized. Even some within the crypto community voiced their own concerns, noting that bitcoin’s appeal comes from being decentralized and independent from government actions, among other characteristics.

But launching a Strategic Bitcoin Reserve is not a novel idea. A select group of publicly-traded companies have had their own bitcoin treasury program for years. And more appear poised to enact their own buying program because they view bitcoin as a high-performing alternative to bonds.

With crypto increasingly viewed as a way to diversify, let’s take a look at who is buying and why they’re HODLing:

Why Publicly-Traded Companies Have Turned to Bitcoin

Many narratives have driven bitcoin adoption over the past decade.

It’s a store of value. It’s a future payment mechanism. It’s digital gold.

How about a hedge against a tariff war?

The world’s most valuable cryptocurrency has shown signs of resilience against tariff fears of late, dropping just 1.5% earlier this month on a day the NASDAQ tumbled more than 10%.

Regardless of the narrative, publicly-traded companies continue to buy. As of April, public companies held around $58 billion bitcoin, a little more than the 3.3% of the total supply, according to bitcointreasuries.com.

Last month, video game retailer GameStop announced it raised $1.5 billion in convertible notes to purchase bitcoin and for other general business purposes. The convertible notes allow GameStop to borrow capital from investors. In exchange, investors have the option to purchase GameStop shares at a predetermined price at a later date.

GameStop’s move followed the lead of Strategy (fka MicroStrategy), a legacy SaaS company led by bitcoin enthusiast Michael Saylor. Over the past five years, Strategy’s stock price has increased by more than 2,300% while Saylor orchestrated an aggressive bitcoin buying program by issuing convertible notes to investors. Overall, the company has acquired more than 530,000 bitcoin, 2.5% of the total supply.

Both Strategy and GameStop have a core business with declining sales. But by using convertible notes to acquire more bitcoin in the hopes prices will rise, they have shielded shareholders from changing consumer habits.

If the price of bitcoin pulls back, both companies risk diluting their share price if investors seek to trigger their convertible bonds and redeem their stock. But the move so far has proven lucrative for Saylor and Strategy. And GameStop stock has pulled off a rally amid market volatility after an initial pullback following the announcement.

Even companies that purchased bitcoin without using leverage have had success. In late 2020, Tesla revealed it had acquired $1.5 billion bitcoin. Five years later, the company still has more than 11,500 tokens.

Tesla shares have increased nearly 750% over the past five years, driven largely by an explosion in electric vehicle sales. The company has also offered a HODLing blueprint for others questioning whether creating a bitcoin treasury is the right move.

Marathon Digital, Riot Platforms, and others have instituted their own bitcoin treasuries. Marathon stock has risen 2,600% and Riot’s has jumped nearly 600% over the past five years, respectively–despite the fact mining is a capital intensive business with diminishing rewards and ample competition.

What’s Next?

Earlier this week, healthtech firm Semler Scientific said it would raise as much as $500 million to purchase bitcoin, according to an SEC filing. The company has already amassed 3,192 bitcoin to date, saying they view it as "a reliable store of value and compelling investment."

A recent market note from Architect Partners estimated that 25% of companies in the Fortune 500 will hold bitcoin by 2030. That would mark a massive increase from the approximately 90 publicly-traded companies HODLing bitcoin as of April.

But more companies are being urged to join the trend, with bitcoin maximalists such as Architect Partners arguing that the price of doing nothing would be far more costly than buying crypto.

The National Center of Public Policy Research, a think tank that champions free markets, has taken a proactive approach to attracting more corporate HODLers.

In December, the think tank wrote Amazon shareholders to recommend they allocate 5% of their $88 billion in cash equivalents to bitcoin, arguing they have outperformed corporate bonds by 1,242% over the past year. Amazon is scheduled to hold a shareholder meeting later this month.

In January, Meta, parent company of Facebook, was considering a similar proposal.

Imagine the corporate buying spree it could set off if they become the next publicly-traded companies to begin stacking.

*This blog is for informational purposes only and does not constitute investment advice or a recommendation to buy, sell, or hold any asset. Cryptocurrency trading and holding involves risk. Past performance is not indicative of future results. *