2021 is destined to be an extraordinary year. Bitcoin has repeatedly broken new highs since the beginning of 2021, setting records and attracting a lot of attention. Among these eyes, there are many attractive institutions. The entry of institutions keeps Bitcoin prices high. There are also lively discussions in the currency circle. Bitcoin has finally ushered in the dawn, which has attracted institutional investment and will expand the application of Bitcoin.
Bitcoin price trend in 2021
Number of Bitcoins held by listed companies
Top 20 listed companies holding Bitcoin
Source: 01 Blockchain Sorting
Microstrategy, All in Bitcoin
Among all listed companies holding bitcoin, Microstrategy is the listed company with the largest number of bitcoins, reaching 108,992 bitcoins, valued at approximately US$2.9 billion. As of press time, Microstrategy’s market value is $6.8 billion. It can be said that Bitcoin occupies half of the company’s market value. The “sequelae” of buying large amounts of Bitcoin is that the trend of Microstrategy’s stock price is very similar to that of Bitcoin.
Microstrategy stock price trend
Many companies revealed that the purchase of Bitcoin was used to diversify asset allocation and fight inflation; while Microstrategy founder Michael Saylor seemed to use Bitcoin to gamble on the future of the company and the individual, even using the name of the company. Borrow money to buy bitcoins. On June 8, 2021, according to the Wall Street Journal, MicroStrategy issued a $400 million junk bond to buy more bitcoins. On August 25, MicroStrategy once again purchased 3907 bitcoins for approximately US$177 million in cash, with an average price of approximately US$45,294 per bitcoin.
The market is a bit confused about the operation of MicroStrategy, and they are all curious about the motives behind MicroStrategy’s aggressive purchase of Bitcoin. In this regard, the founder Sayler said: “If you borrow billions of dollars at a 1% interest rate and invest them in the next large technology digital network that you think will become the dominant Amazon, Google, or Facebook, you Why not?”
For a publicly listed American business intelligence software company, this is a bit “not doing business properly.” According to Microstrategy’s financial report, the company spent US$1.615 billion in three months on the cash flow statement, of which only US$1.34 million was used to purchase fixed assets and other “real assets”, which means that 99.917% of the money spent was used to buy bits. Currency. Last quarter, it spent US$1.086 billion to buy Bitcoin and US$447,000 to purchase fixed assets, which means that 99.96% of them were used to buy Bitcoin.
Microstrategy’s investment activity in the second quarter
Source: Microstrategy 2021 Q2 Financial Report
These actions also made Microstrategy employees a little unhappy. The company was originally positioned as a business intelligence software company, but now that business intelligence software invests in R&D investment activities and even a fraction of the money to buy Bitcoin is not available, then is it still a business intelligence software company? Is it profitable from business intelligence software or Bitcoin? An employee said on the job site Glassdoor, “It’s weird to buy Bitcoin. As employees like us, the company is a bit out of business.”
Microstrategy started buying Bitcoin in July 2020. At the quarterly meeting at the time, Seiler announced that Microstrategy planned to purchase bitcoin, gold and other alternative assets to replace the cash still held on the balance sheet. In August 2020, Microstrategy used $250 million in cash in stock to purchase 21,454 bitcoins. Then, in September and December 2020, the company spent another $175 million and $50 million to buy bitcoins. A dramatic scene in the history of securities appeared on December 11, 2020. Microstrategy issued US$650 million convertible bonds, all of which were used to buy Bitcoin, setting a precedent for listed companies to borrow to buy Bitcoin. In addition, Microstrategy has also become the first listed company to purchase Bitcoin and incorporate it into its capital allocation strategy.
In fact, Thaler was not optimistic about the development of Bitcoin in the early days, and even tweeted satirizing the future of Bitcoin. He once said on Twitter: “Bitcoin will not jump for a few days. It will end up like online gambling in the end.”
Thaler’s early tweets
Seiler graduated from the Massachusetts Institute of Technology. The desire of founding Microstrategy is to build Microstrategy into a general business group, which will be passed on forever from generation to generation. For this reason, he has repeatedly rejected other acquisition requests. Microstrategy used to be very smooth. With its technical advantages in business intelligence analysis software, it successfully landed on the Nasdaq Stock Exchange. Thaler’s value was as high as 7 billion US dollars at one time. Man with money”.
In 2020, the epidemic began to sweep the United States, and the Federal Reserve launched a “large water release” policy to save the U.S. stock market and economy. In an interview, Seiler revealed that Microstrategy had $500 million in idle cash on the books at the beginning of the epidemic. At the time, Thaler was not interested in Bitcoin. On a rainy day, he looked out the window, looked at the Washington Monument opposite, and asked his subordinates to buy U.S. Treasury bonds. However, it didn’t take long for the US epidemic to get out of control, becoming a more serious country than China and Italy. In response to economic shocks, the Fed first implemented zero interest rates and then madly printed money, which led to a large depreciation of the US Treasury bonds purchased by Microstrategy. Saylor said: “From a company’s point of view, we must ensure that the rate of return on investment exceeds the depreciation of the dollar. After thinking about it, Bitcoin is qualified.”
For Microstrategy, buying Bitcoin is to increase its return on investment. The outbreak of the epidemic brought Microstrategy into contact with Bitcoin. Judging from the current Bitcoin price, Microstrategy is undoubtedly a success.
Tesla, the troublemaker of Bitcoin
Musk ( Elon Musk, ) is undoubtedly the world’s most influential “net red.” A single tweet can change the trend of Bitcoin prices. Before Trump’s Twitter was blocked, Musk’s Twitter influence might be second. However, since Trump was banned by Twitter, it has been difficult for Twitter to find another figure whose influence “matches” Musk.
Musk’s impact on Bitcoin prices
On February 10, 2021, Tesla announced that it would purchase $1.5 billion worth of Bitcoin and accept Bitcoin as a means of payment. As soon as this news came out, the price of Bitcoin rose by more than 10%. Tesla’s profit in Q1 of 2021 is 438 million US dollars. According to the calculation, it means that the profit of one year has been bought in Bitcoin.
When the time came to May 2021, Musk said on Twitter that Tesla has suspended its plan to use Bitcoin to buy Tesla due to concerns about climate change. After this tweet was sent, Bitcoin fell by more than 10%, and Tesla’s stock price also fell. In fact, when Tesla announced its acceptance of cryptocurrency in March, it was strongly criticized by some environmental groups and investors. Musk also said that Tesla will not sell Bitcoin at this time and intends to use it for settlement after mining has switched to sustainable energy.
Tesla purchased 46,000 bitcoins in early February this year, with an average price of $32,600. In April of this year, Tesla disclosed that it had sold 10% of its holdings of Bitcoin in the first quarter, or about 4,600, with an average selling price of $59,100. This transaction brought the company $272 million in revenue, making Tesla in A pre-tax profit of US$101 million was realized in Q1 of 2021. According to Tesla’s 2021 Q2 financial report, Tesla did not sell any bitcoins. At present, Musk has fulfilled his promise that Tesla will not sell Bitcoin at present; however, the future is hard to say.
Tesla 2021 Q2 financial report overview
At The B Word conference on July 21, Musk said that Tesla’s European bank deposits are negative interest rates (that is, a fee is required to the bank every once in a while), which will make people reconsider holding Bitcoin. In addition, Musk also revealed that he and SpaceX both hold Bitcoin. Although he is worried about the impact of Bitcoin on the environment, he generally supports this cryptocurrency.
Square: Will not buy any bitcoins at this time
The US payment giant Square bought Bitcoin between October 2020 and February 2021. On October 10, 2020, the company purchased 4709 bitcoins with a total value of approximately $50 million. At that time, this investment accounted for almost 1% of the company’s total assets. On February 24, 2021, Square once again bought about 3,318 bitcoins for $170 million, with an average price of $51,200. After the two transactions are combined, the cost price of a single bitcoin is approximately $27,407.
The company once stated in a press release that cryptocurrency is a means of economic empowerment and can provide the world with a way to participate in the global currency system, which is consistent with the company’s mission. Square’s Chief Financial Officer Amrita Ahuja said: “Bitcoin has the potential to become a more common currency in the future. As its utilization continues to grow, we intend to learn and participate in a more compliant way. For companies with more inclusive future products, this investment is a critical step on this path.”
In fact, as early as 2019, Square established an independent team, Square Crypto, dedicated to contributing to the open source work of Bitcoin. Square even launched a non-profit organization, the Cryptocurrency Open Patent Alliance (COPA), to encourage crypto innovation and open access to patented crypto products. This series of support for cryptocurrency has brought rich returns to Square. Square allows consumers to use Cash App (a software launched by Square that specializes in bitcoin-related transactions) to consume and store bitcoin. Square’s Bitcoin revenue also increased from $516.5 million in 2019 to $4.75 billion last year.
Square’s Cash App continues to grow
Source: The Block
The news of Square’s purchase of bitcoin also drew comments from Thaler. Seiler commented on Square’s news on Twitter: “Bitcoin is a good reserve asset. I admire Square’s team for leading this trend.”
However, as Bitcoin went through a downturn from April to August, the Bitcoin assets on Square’s books began to show losses. On May 15, Square released its 2021 Q1 financial report. After recording a loss of $20 million in related Bitcoin investments, Chief Financial Officer Amrita Ahuja stated that Square currently has no further plans to purchase Bitcoin. In addition, he also mentioned the carbon footprint of the Bitcoin network, saying that this needs to be resolved in the future.
Ahuja said that the market value of Bitcoin held by Square had risen to US$472 million, but at the time of the financial report, it recorded a loss of US$20 million in Bitcoin investment. The $220 million used to buy bitcoin accounts for 5% of the company’s cash balance.
Bitcoin still has high volatility. Even though its rate of return is very impressive overall, its “roller coaster” price trend is not what market investors would like to see, and this will affect Square’s stock price. The unpredictable trend of Bitcoin makes Square’s overall market value unpredictable. In addition, Square is still in a stage of rapid development. The losses caused by buying Bitcoin are unbearable for Square. This also led to Square’s statement at the financial report meeting that it has no further plans to buy bitcoin after recording a loss.
Coinbase’s strategy of buying Bitcoin with one stone, three birds with one stone
Coinbase is now the world’s second largest cryptocurrency exchange and the world’s largest listed cryptocurrency exchange. At press time, Coinbase’s market value came to $54 billion.
Coinbase stock price trend
The world’s top 6 cryptocurrency exchanges
Source: Coin Market Cap
Founded in 2012, Coinbase is the first cryptocurrency exchange with a formal license in the United States , founded by former Airbnb engineer Brian Armtrong. In 2010, Armstrong accidentally read a Bitcoin white paper, which opened the door to cryptocurrency. In order to study more in-depth, he bought more than 1,000 bitcoins at a price of 9 US dollars. When the price of bitcoin fell to 2 US dollars, Armstrong was not deterred and left the market. He always insisted on writing code to buy and store bitcoins. currency. In the summer two years later, Armstrong developed a wallet alone, Coinbase. Since then, he has continued to develop Coinbase and successfully listed in 2021.
On August 20, 2021, Coinbase revealed that it will purchase $500 million worth of cryptocurrency, and plans to invest 10% of all profits in digital assets in the future. Coinbase CEO Brian Armstrong said that over time, the company hopes to increase the percentage of profit used to purchase cryptocurrencies. The company also emphasized its commitment to long-term investment in the crypto industry, stating that future investments may be determined based on customer holdings.
Coinbase will buy and sell cryptocurrencies through third-party platforms or over-the-counter trading platforms to avoid conflicts of interest with its customers. In addition, Coinbase also announced that it has accumulated a fund of 4 billion US dollars to prepare for the supervision and the next “crypto winter.”
Coinbase’s profit mainly comes from the trading of cryptocurrencies. The more transactions, the more revenue for Coinbase. Whether it is a sharp rise or fall in the market, Coinbase can benefit from it. Buying cryptocurrencies can further increase the market value of cryptocurrencies. In addition to being able to withstand risks, cryptocurrencies have a chance to appreciate. Finally, the most important thing for Coinbase is to indirectly promote revenue growth. Buying cryptocurrency is a move that kills three birds with one stone for Coinbase.
Beautiful pictures copied in high positions
On March 7, 2021, Meitu, the parent company of Meitu Xiuxiu, a Hong Kong stock listed company, issued an announcement stating that it had purchased 15,000 Ethereum and 379 Bitcoin in open market transactions , with a total consideration of approximately 2,210 respectively. Ten thousand U.S. dollars and 17.9 million U.S. dollars, a total of 40 million U.S. dollars (corresponding to about 260 million yuan at that time). Affected by this news, on the morning of March 8 the next day, Meitu’s stock price opened sharply 14% higher.
In addition, on March 17, its wholly-owned subsidiary Miracle Vision purchased a further 16,000 Ethereum and approximately 386 Bitcoins in open market transactions, with a total consideration of US$28.4 million and US$21.6 million, for a total of US$50 million. .
Cai Wensheng, chairman of Meitu, issued a message in the circle of friends at the time, saying that Meitu would continue to deploy the blockchain. Cai Wensheng said: “Someone must be the first to eat the crab. This should be regarded as the first Hong Kong listed company to purchase digital currency, and it can also be regarded as the world’s first listed company to use Ether as a digital asset reserve.”
On April 8, Meitu issued another announcement stating that the company once again purchased approximately 175.7 Bitcoins in open market transactions, with a total consideration of approximately US$10 million. Through the above three investments, Meitu currently holds more than 940 Bitcoins, with an average purchase price of approximately 52,610 U.S. dollars, and also holds 31,000 Ether, with an average purchase price of approximately 1,629 U.S. dollars. So far, Meitu’s total investment in cryptocurrency has reached 100 million U.S. dollars.
However, the previous “half cut” of the cryptocurrency market has caused people to question Meitu’s investment in cryptocurrency. Some netizens teased that Tesla bought 30,000, while Meitu bought 50,000. The collapse of the cryptocurrency market also caused the stock price of Meitu to plummet. As of the close of the market on August 27, Meitu’s share price was reported at 1.74 Hong Kong dollars, which has plummeted 57.66% since its highest point this year.
Meitu’s stock price trend
Although the cryptocurrency market is gradually recovering, Meitu can be said to have bought Bitcoin at the high point. The market does not approve of its “buying currency” behavior, and the stock price is well reflected. For Bitcoin, even if its losses are narrowing, even if it will gradually increase in the future, the high cost of opening a position will greatly compress the return on investment of Meitu.
Why do listed companies love Bitcoin?
For most listed companies that invest in Bitcoin, the pursuit of wealth growth and the fear of inflation and asset shrinking are no small motives. With the continuous participation of institutions, among Bitcoin supporters, Bitcoin as an asset has become more and more mature and safe. Looking at other investment methods on the market, no matter how prosperous investment targets are, it seems that Bitcoin’s strong rise cannot be compared.
The desire for wealth growth drives listed companies to enter the market to buy Bitcoin. JP Morgan Chase released a report in January stating that Bitcoin is becoming a competitor to gold. Once Bitcoin becomes a recognized safe haven in the market, then Bitcoin will be able to attract as much money as investing in gold. In theory, the price of Bitcoin It may reach 146,000 US dollars.
The Ark Fund Company, which specializes in investing in disruptive technologies, is even more aggressive, calling out a target price of $400,000. The Ark Fund believes that if all the companies in the S&P 500 stocks put 10% of their cash into Bitcoin, the price of one Bitcoin will rise to $400,000.
Ark Fund’s target price for Bitcoin
Source: Ark Fund
Square also explained when buying Bitcoin: Square believes that cryptocurrency is a means of enhancing economic power, and that cryptocurrency provides a way to participate in the global currency system, which is in line with Square’s mission. Thaler explained the logic of his large purchase of Bitcoin: “Before choosing Bitcoin investment, I had considered investing our assets in ordinary currencies, bonds, stocks, index funds, options, real estate, precious metals, and art. Products and so on, but Bitcoin seems to be more of a good long-term investment asset than ever.”
With the overall deterioration of the economic environment, the government continues to print money and issue bonds, which has led to zero or even negative yields in recent years, including traditional assets such as government bonds. Such a poor rate of return drives investors to actively look for new investment alternatives. More and more investors are using Bitcoin as a hedge against inflation risks and cash depreciation.
Posted by:CoinYuppie，Reprinted with attribution to:https://coinyuppie.com/what-are-the-big-companies-that-invested-in-bitcoin-now/
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