retail investor sells while American institutions "secretly" buy

A new report from the BTC technology and Financial Service company River predicts that in the next 18 months, some American companies will increase their investment in BTC (BTC).

American company get on board

It is reported that within the next year and a half, about 10% of US companies may convert their 1.5% treasury reserves (approximately $10.35 billion) into BTC.

River’s analysts also pointed out that traditional corporate financial strategies rely on cash and other short-term cash equivalents, but these assets have a poor store of value capability. Therefore, River’s analysis believes that:

“These investments can generate moderate returns close to the federal fund Intrerest Rate (currently over 5%). However, even these short-term investments often fail to outpace Inflation, resulting in a drop in the value of government bonds.”

The report points out that inflation erosion has also caused Apple Inc. (currently with a Market Cap of trillions of dollars) to lose $15 billion in bond holdings over the past 10 years.

MicroStrategy’s Corporate Financial Strategy

The analyst’s forecast indicates that the corporate financial strategy promoted by MicroStrategy founder Michael Saylor will be adopted by more and more people.

In June 2024, MicroStrategy completed an additional $800 million senior convertible note debt sale at an interest rate of 2.25%, maturing in 2032. MicroStrategy used the proceeds from the corporate debt to purchase an additional 11,931 BTC.

Saile defines BTC as an asset that can guarantee ‘economic immortality’ for enterprises and companies, because the supply of BTC is limited, and there is no counterparty risk inherent in other value storage means such as real estate or stocks.

MicroStrategy’s second-quarter financial report shows that it currently holds 226,500 BTC, which was worth about $14.7 billion at the time.

US Banks Entering the Market

Previously, the US banking giant Wells Fargo disclosed its investment in multiple Bitcoin ETFs, making it the latest major financial institution to enter the cryptocurrency field.

Documents submitted to the US Securities and Exchange Commission (SEC) show that the bank has purchased shares of Grayscale’s GBTC Spot BTC exchange traded fund (ETF), and also holds shares of Bitcoin Depot Inc., a BTC ATM provider.

But the exposure is small, with Wells Fargo investing $141,817 in GBTC compared to less than $1,200 in ProShares. Bitcoin Depot has a risk exposure of just $99.

Not only that, the Paris Bank of France and the New York Mellon Bank have also invested heavily in Bitcoin ETFs. This indicates that despite the relatively small risk exposure, the investment trend of traditional Financial Institutions is still on the rise.

Beyond Warren Buffett - A New Era of Corporate Finance?

Saylor’s BTC financial strategy has outperformed Warren Buffett’s investment firm, Berkshire Hathaway. Since adopting the BTC financial strategy, MicroStrategy has pumped more than 1,000%. In contrast, Berkshire Hathaway’s stock price has pumped 104.75% during the same period.

Buffett refuses to add BTC to his investment portfolio, or recommend BTC as a hedge against fiat inflation.