Why Are Companies Adding Bitcoin to Their Treasury Reserves?

The market of crypto assets is on the rise. The growth indications are undeniable, as the market cap has crossed 2.3 trillion. Bitcoin, unsurprisingly, has occupied the most significant chunk of this market.

Several publicly traded companies, including Tesla, MicroStrategy, Nexon, Metaplanet, Block, and Meitu, have allocated a portion of their treasury reserves to Bitcoin, aiming to diversify their portfolios and capitalize on the digital asset's potential.

Collectively, these companies have amassed a substantial amount of Bitcoin, indicating a growing trend among institutional investors. However, the extent of their involvement varies, and each company has its unique strategy.

1. Tesla

According to recent filings, Tesla's digital asset holdings, primarily consisting of Bitcoin, remained unchanged for the quarters that ended on March 31st, 2023, and March 31st, 2024, valued at US$184 million. The filings also mentioned some Dogecoins, which the company accepts for certain merchandise, but the quantity was described as ‘minimal.'

2. MicroStrategy

While Tesla's Bitcoin holdings remained stagnant, MicroStrategy continued to add to its stash. During the first quarter of 2024, the company purchased more Bitcoin, bringing its net holdings to a total of 214,400 BTCs, valued at approximately US$13.6 billion.

3. Nexon

Nexon's involvement with Bitcoin set a new trend. On the 288th of this year, the company, a well-known gaming publisher, became the first publicly traded Japanese company to invest in Bitcoin. Nexon's investment was valued at US$100 million, which is JPY11.1 billion and represents less than 2% of the company's total cash and cash equivalents.

4. Metaplanet, Inc.

Another firm that is capitalizing on Bitcoin's yielding potential is the publicly traded company Metaplanet, Inc. Much like MicroStrategy, the company keeps increasing its Bitcoin holdings. On July 16th this year, the company announced its latest bitcoin purchase, adding another 21.88 BTC to its portfolio for 200 million yen, or approximately US$1.26 million.

5. Square, Inc./Block

After changing its name from Square to Block in December 2021, the company has reportedly already amassed a substantial Bitcoin stack. It purchased 4,709 bitcoins in October 2020 and another 3,318 in early 2021. By the beginning of May, with the price of Bitcoin around US$59,000, the company's Bitcoin holdings amounted to nearly US$4.7 billion.

6. Meitu

Another company that has been boosting its treasury with Bitcoin is the Chinese technology company Meitu. Meitu's cryptocurrency holdings have surged to approximately $100 million, propelled by strategic purchases, including a significant investment of $10 million in Bitcoin. This particular acquisition involved purchasing 175.67798279 Bitcoin units at an average price of around $57,000 each.