Bitcoin & Data Science
Back in October of last year, I wrote a post in this series about the trend of companies adding Bitcoin to their balance sheet. In a few short months we’ve seen that trend ramp up with MicroStrategy still leading the charge. Just last week, Tesla – led by billionaire and modern day Renaissance man Elon Musk – announced the company had purchased $1.5 Billion of Bitcoin within their corporate treasury. “I think bitcoin is really on the verge of getting broad acceptance by conventional finance people.” … “When fiat currency has negative real interest, only a fool wouldn’t look elsewhere” – Elon Musk. Musk’s public approval of Bitcoin, and by putting his money where his mouth is, really paves the way for the next wave of major companies to join the list.
The site bitcointreasuries.org (pictured above) tracks the Bitcoin held by companies around the world. As you can see, Tesla now owns .229% of the total amount of Bitcoin that will ever exist. Square, led by CEO Jack Dorsey, also made another large Bitcoin acquision, increasing their stack by 70%. And indeed MicroStrategy continues their regular Bitcoin purchases. Since the last time I wrote on the topic, they have increased their holdings by an additional 20,000 BTC and now hold .433% of the total 21 million coins that will ever exist. Including that held by privately owned companies, an amazing 6.5% of the total supply is now held by companies.
The Tesla purchase has created a lot of buzz on Wall Street and everyone is taking bets on what company will be next – Apple? Amazon? PayPal? MicroStrategy recently hosted an online seminar for company CFOs and board members to explain their Bitcoin acquisition strategy, best practices, and regulations involved. Thousands of companies were represented at the event.
MicroStrategy CEO Michael Saylor has made it no secret that their plan is to hold their Bitcoin long into the future. He has been quoted saying he believes the company will still hold Bitcoin several hundred years in the future. If Musk, Dorsey, and the Bitcoin-buying CEOs yet to come are buying for the same reasons as Saylor – to combat the devaluation of fiat currencies – you can expect them to hold for the long term as well. Indeed, company treasuries are not in the business of day trading, they are meant to preserve the wealth of the company. This trend of companies buying up Bitcoin could very well have a large impact on the HODL Waves discussed in Run the Numbers #13. HODL Waves, seen in the graph above, are large groups of UTXOs that are not spent for long periods of time. The older the UTXOs, the darker they appear on the graph. 10 years from now it is likely we will look at this chart and see a massive HODL Wave formed in 2021, largely due to corporations and institutions coming in and buying up huge amounts of Bitcoin.