U.S. Companies Dive Into Bitcoin Investment Ahead of Trump Government Launch

US companies are piling into bitcoin ahead of the launch of President-elect Donald Trump's administration.

The New York Times reported on the 8th (local time) that more than 70 listed companies have begun investing in bitcoin since President Trump announced last year that he would become a “crypto president.”

It marks a dramatic shift away from the traditional approach of corporate finance departments, which have been focused on preserving cash rather than chasing higher returns.

MicroStrategy is the world's largest bitcoin holder. A software company, MicroStrategy has been buying bitcoin since 2020 and currently holds more than $40bn in the cryptocurrency. Its stock has risen by about 2,000 per cent over the past four years.

A growing number of companies are following suit. Rumble, a conservative social media company, announced in November that it would put $20m of its cash into bitcoin. The company's shares have risen by about 70 per cent since the announcement.

Simon Gerovich, chief executive of Meta Planet, a Japanese investment company, has also said that he will increase Meta Planet's bitcoin holdings to 10,000 this year.

And Joe Davie, chief executive of marketing technology company Banzai, announced in November that he would put up to 10 per cent of its $4.3m cash holdings into bitcoin. “The bitcoin investment will help protect the company if the value of the US dollar falls due to inflation,” Davie said.

California medical device maker Semler Scientific has gone even further, ploughing the bulk of its corporate assets into bitcoin. The company used to put its corporate funds towards acquiring other businesses or buying back its own stock. But now it is pursuing higher returns through bitcoin.

As the price of bitcoin has surged, even companies with no obvious links to cryptocurrency are getting involved. The coin investment, once seen as a fringe activity, is now becoming a mainstream corporate practice, the NYT said.

However, the move contrasts sharply with the traditional approach of corporate finance departments, which have been tasked with protecting cash. Now, they are shifting their stance towards taking on more risk in a bid to generate higher returns.

There are also concerns about companies buying bitcoin. Banzai chief Davie said he received a complaint call from shareholders asking “what the hell is going on?” after announcing his bitcoin investment plan.

Naresh Agarwal, deputy director of the Association for Corporate Finance Executives, said: “I don't understand how risk-averse boards are putting money into digital assets. The cryptocurrency is very volatile, so such investments can't be justified.”

“Now, even people who don't invest in bitcoin will be exposed to its volatility,” said Duke University law professor Curtis J. Reiner.