Many significant public corporations invested billions in crypto and now they’re taking a big hit. Bitcoin’s value has plummeted significantly over the previous three months. Falling by almost $1.4 trillion since hitting an all-time high in November last year. Individual cryptocurrency traders have sold, lost, sulked. And then bought again within that time period, but publicly traded firms. Have also suffered losses totaling about $7 billion. According to crypto monitoring firm CoinGecko.
As previously reported by Quartz. Bitcoin is currently held on the balance sheets of 27 publicly traded firms. Putting the volatile digital currency in a position. Where more stable assets are often found: in the stock market. Despite the fact that Bitcoin became an increasingly popular inflation hedge in 2021. The cryptocurrency’s recent slump has left many major corporations. Looking for a way to recover their losses. It’s just that the hedge hasn’t been trustworthy lately.
A total of over 169,000 Bitcoin are owned by two publicly traded firms. Electric-car manufacturer Tesla and software company MicroStrategy. This represents nearly 78 percent of all Bitcoin owned by publicly traded corporations. A single company, MicroStrategy, accounts for more than half of this total. With 121,000 Bitcoin worth $3.5 billion in its possession.
Over the course of several months, MicroStrategy has amassed a substantial amount of Bitcoin. In its crypto reserves, with no qualms about doing so. Bitcoin has been a personal investment for company founder and CEO Michael Saylor. Who has been vocal in his support and praise for the digital currency on his Twitter page. According to Business Insider, Saylor presently has at least $866 million in Bitcoin on his balance sheet.
MicroStrategy will not abandon its Bitcoin bets for many significant public corporations
Even in the aftermath of the crypto-crisis, MicroStrategy has made it clear. That it has no intention of backing away from its Bitcoin commitments. This week, MicroStrategy CFO Phong Le. Said in an interview with the Wall Street Journal that the company’s Bitcoin strategy. Has been to “buy and hold.” “To the degree that we have excess cash flows. Or discover other methods to acquire money. We continue to put money into Bitcoin,” Le said.
In response to Fortune’s request for comment, MicroStrategy did not immediately react.
Tesla has also remained solid in its decision to keep its cryptocurrency holdings. This year’s “crypto winter” hasn’t depleted the business’s Bitcoin holdings, according to its Q4 financial report. Which was released on Wednesday. The company presently has $1.26 billion in Bitcoin, according to the report. Tesla made headlines earlier this year when it announced. That it will begin accepting Bitcoin as payment for its products. However, the firm soon reversed course after receiving negative feedback. About the high energy consumption associated with Bitcoin mining. The company has not yet decided whether or not to resume taking Bitcoin payments.
Additionally, financial services and digital payments company Square (8,027 Bitcoin). Cryptocurrency exchange platform Coinbase (4,483 Bitcoin). And South Korean video game developer Nexon. Have all seen their holdings for many significant of bitcoin plummet. As a result of the crypto collapse (1,717 Bitcoin).
Several companies, like MicroStrategy, began storing their assets in cryptocurrency. Believing that Bitcoin would be a more secure long-term investment. Than the United Stated dollar for storing their assets. In an August 2020 statement. MicroStrategy explained that investing in cryptocurrency would. “Provide not only a reasonable hedge against inflation. But also the prospect of earning a higher return than other investments.”