Payments company Square’s announcement that it would put some $50 million, or 1% of its assets, into bitcoin has touched off speculation that more corporations might do the same.
Jack Dorsey, the Twitter CEO who also helms Square, is a longtime bitcoin bull so it wasn’t a huge surprise that his company would put some of its corporate liquidity into the cryptocurrency. He’s following the path of MicroStrategy CEO Michael Saylor, who has invested at least $425 million of the company’s assets in bitcoin.
None other than Changpeng “CZ” Zhao, CEO of Binance, the world’s largest cryptocurrency exchange, tweeted a question: “Who’s going to be the 3rd public company to hold #bitcoin in treasury?” Guesses included Twitter, Tesla, Apple, Warren Buffett’s Berkshire Hathaway, even the burger chain Wendy’s.
“It’s a bit surreal to see gigantic corporate entities now going knee-deep in bitcoin,” Mati Greenspan, founder of the foreign-exchange and cryptocurrency analysis firm Quantum Economics, wrote to subscribers on Thursday.
One clever, enterprising soul even ginned up a spreadsheet to keep track of the corporate purchases and published it as a new website, bitcointreasuries.org:
Companies in the Standard & Poor’s 500 Index of large U.S. stocks have a combined $2.3 trillion in cash and short-term investments. So a 1% across-the-board allocation to bitcoin would amount to $23 billion of purchases. That’s just over 10% of bitcoin’s total market capitalization, currently about $200 billion.
A big bullish investment thesis for bitcoin is that large institutional investors are on the verge of diving into cryptocurrencies as an asset class, led by money managers like Fidelity Investments that have embraced the new technology and digital-asset markets.
Now it seems like corporate purchases might add to that buying pressure.