How much Bitcoin do U.S. listed companies and fund giants hold with their continuous buying?

Original authors: Ana Paula Pereira, Sander Lutz

Original compilation: Moni, Odaily Planet Daily

After 40 trading days since the launch of the spot Bitcoin ETF, BlackRock's IBIT, listed on Nasdaq, has reached a significant milestone, with its Bitcoin holdings surpassing those of Michael Saylor's publicly traded company, MicroStrategy.

Data shows that as of March 8, IBIT holds approximately 195,985 BTC (as shown in the chart below), with a market value exceeding $13.579 billion, while MicroStrategy's Bitcoin holdings are about 193,000 BTC. On the same day, Bitcoin historically broke through $70,000 for the first time.

Moreover, the cumulative trading volume of the spot Bitcoin ETF has "easily" exceeded $100 billion in less than two months since its launch. According to data updated by Yahoo Finance on March 10, the cumulative trading volume of spot Bitcoin reached $10.659 billion as of March 8.

In fact, unbeknownst to many, a competition for Bitcoin reserves has already begun among U.S. listed companies.

Are U.S. listed companies/funds' Bitcoin reserves becoming a "three-way battle"?

As Bitcoin prices hit historic highs, U.S. listed companies/funds are accelerating their accumulation of Bitcoin, "devouring" it at a pace that even exceeds the rate at which Bitcoin is mined. According to current market trends, U.S. listed companies have formed a "three-way battle," with the "three heads" being: the spot Bitcoin ETF, MicroStrategy, and Tesla (and SpaceX).

First, let's take a look at the spot Bitcoin ETFs listed in the U.S. According to data compiled by BitMEX Research, apart from Grayscale's GBTC, the other nine spot Bitcoin ETFs have been increasing their Bitcoin reserves since receiving approval from the U.S. Securities and Exchange Commission on January 11.

One key reason why spot Bitcoin ETF issuers continue to accumulate BTC is regulatory requirements. In the prior approval conditions for spot Bitcoin ETFs, the U.S. Securities and Exchange Commission required the creation of so-called cash rather than physical assets, meaning that fund issuers must purchase Bitcoin with cash when creating shares or sell Bitcoin for cash when they have excess shares.

Of course, one undeniable point is that ETFs, as stock-like products, not only provide a more capital-efficient trading option but also open the door to increased leverage. With a large influx of retail users into the market, it is expected that institutions will gradually enter the cryptocurrency market, and increasing their holdings will also boost confidence among both institutions and retail investors.

As for another U.S. listed company, MicroStrategy, it can now be considered an "old hand" in the Bitcoin market, and it always seems to time its Bitcoin purchases perfectly.

Just three days before Bitcoin first broke through $70,000 on March 8, MicroStrategy "suddenly" announced plans to issue $600 million in convertible senior notes due in 2030 to qualified institutional buyers through a private placement, depending on market conditions and other factors. A day later, they announced plans to increase the issuance size of the convertible senior notes to $700 million.

At the end of February, MicroStrategy and its subsidiaries purchased approximately 3,000 Bitcoins for about $155.4 million in cash. According to the latest data from Coinglass, MicroStrategy currently holds approximately 129,698 BTC, and if calculated at a price exceeding $70,000, MicroStrategy's Bitcoin holdings have an unrealized gain of about $7 billion.

The reason MicroStrategy is competing for Bitcoin reserves likely has a "killing two birds with one stone" intention, as besides the appreciation of its holdings, its stock price has also begun to rebound rapidly. According to U.S. stock data, benefiting from Bitcoin's price surpassing $70,000, MicroStrategy's stock price successfully broke through $1,400, closing at $1,425.59 last week, with a one-year increase of 538.82% and a staggering five-year increase of 861.09%.

At least for now, MicroStrategy's investment strategy seems to be successful. Since August 2020, the value of Bitcoin held by MicroStrategy has multiplied, providing substantial returns to the company's shareholders. It is reported that MicroStrategy's chairman, Michael Saylor, has seen his personal wealth increase by about $700 million as his company's stock and Bitcoin prices have risen consecutively. Michael Saylor is the largest investor in MicroStrategy, owning about 12% of the company. He also revealed that he personally held 17,732 Bitcoins in 2020, so his holdings and positions have risen from $2.27 billion at the beginning of this week to $2.96 billion.

Finally, compared to the "high-profile" spot Bitcoin ETFs and MicroStrategy, Elon Musk's Tesla and SpaceX seem much more low-key. Although no relevant data was disclosed in the recent financial reports (Note: Tesla and SpaceX have not yet released their Q1 2024 financial reports), on-chain data analysis platform Arkham has monitored that Tesla currently holds about 11,510 BTC across 68 addresses (worth approximately $780 million), while SpaceX holds about 8,290 BTC across 28 addresses (worth approximately $560 million). This means that Tesla currently holds about 1,789 BTC more than the 9,720 BTC balance reported in the last financial report.

The crypto community speculates that Tesla may have started to repurchase Bitcoin, or whether the recent digital changes were due to accounting errors. Some users suggest that the company may have begun purchasing Bitcoin after the last financial report conference call and could report new purchases in the next financial conference call.

Why should we pay attention to the Bitcoin reserves of listed companies/funds?

Listed companies/funds are important participants in the market economy, and their investment behaviors often serve as a barometer. When listed companies hold Bitcoin, it indicates their optimism about Bitcoin's future value, which may attract more investors' attention to Bitcoin, thereby driving up its price.

Moreover, when listed companies/funds hold Bitcoin, it can increase the market circulation of Bitcoin, making it easier to trade, which is beneficial for the development of the Bitcoin market and can even demonstrate their openness to new technologies, enhancing the company's image.

Market analysis suggests that with listed companies/funds increasing their Bitcoin reserves, it may "stimulate" more crypto whales to enter the market. For instance, shortly after MicroStrategy announced it would continue to purchase Bitcoin, HODL1 5 Capital noticed the buying actions of a mysterious whale, which has recently accumulated approximately 51,064 BTC, worth about $3.5 billion.

From this perspective, the investment strategies of listed companies/funds also indicate their confidence in Bitcoin's long-term value, which may encourage other crypto whales to continue holding or increasing their Bitcoin positions. Coupled with the successful investments of the spot Bitcoin ETF, MicroStrategy, and Tesla, this may attract other crypto whales to follow suit, potentially leading to further increases in Bitcoin prices.

Of course, Bitcoin remains an emerging asset class, and the regulatory environment is still not perfect. Investors need to pay attention to how regulatory policy changes impact the Bitcoin reserves of listed companies. Overall, paying attention to the Bitcoin reserves of listed companies/funds can help us understand important information such as market trends, investment risks, company financial conditions, and the regulatory environment, enabling ordinary investors to make more informed investment decisions.