Key Summary
The trend of corporate investment in Bitcoin is expanding: After the U.S. Securities and Exchange Commission (SEC) approved the Bitcoin spot ETF, corporate investment strategies have gradually heated up. This trend is not limited to Western markets and is extending to Asia.
Why companies choose Bitcoin: Bitcoin has shown great appeal in diversifying asset allocation, improving capital management efficiency, and enhancing corporate value.
Participation and development prospects in the Asian market: Investments by Asian companies in Bitcoin are still in their early stages, but successful cases like Metaplanet indicate that the market has significant growth potential. However, regulatory uncertainty and lack of institutional support remain major obstacles.
1. Introduction
This year, the U.S. Securities and Exchange Commission (SEC) approved the Bitcoin spot ETF. This move has become a milestone event for the institutionalization of crypto assets. Since then, more and more companies have begun to incorporate Bitcoin into their investment strategies. For example, MicroStrategy has made Bitcoin one of its important financial assets. This trend is rapidly expanding from Western markets to Asian markets, gradually becoming a global phenomenon. This article will analyze the main strategies driving corporate adoption of Bitcoin and the influencing factors behind it.
2. The Boom of Corporate Investment in Bitcoin
As Bitcoin's value gradually gains recognition, its appeal continues to grow. At the national level, some governments are also beginning to discuss investing in Bitcoin. For example, El Salvador has taken proactive steps to continuously purchase Bitcoin. In the United States, discussions about then-presidential candidate Donald Trump's plan to reserve Bitcoin have become a focal point. Additionally, Poland and Suriname are exploring the possibility of positioning Bitcoin as a strategic asset.
However, except for El Salvador, most countries' investments in Bitcoin remain at the policy discussion or campaign promise stage, and there is still some time before actual implementation. The United States has not yet directly invested in Bitcoin but holds some Bitcoin to recover criminal proceeds. Additionally, due to the high volatility of Bitcoin prices, many countries' central banks still tend to choose gold as a more stable reserve asset.
Source: Bitcointreasuries, Tiger Research
Government actions on Bitcoin are slow and limited, but corporate participation is accelerating. Companies like MicroStrategy, Semler Scientific, and Tesla have made bold investments in the Bitcoin industry. This sharply contrasts with the cautious stance taken by most governments.
3. Three Major Reasons Companies Focus on Bitcoin
Investing in Bitcoin is no longer just a trend; it is gradually becoming a core financial strategy for companies. Bitcoin attracts corporate attention due to its unique characteristics, with its value mainly reflected in the following three aspects:
3.1. Achieving Asset Diversification
Traditionally, corporate financial assets are usually allocated around stable options like cash and government bonds. These assets ensure liquidity and help mitigate risks but often have low yields, making it difficult to outpace inflation, potentially leading to erosion of real asset value.
Source: Michael Saylor X
As an emerging alternative asset, Bitcoin can effectively compensate for these shortcomings. It not only has high return potential but also diversifies investment risks, providing companies with a new asset allocation option. Over the past five years, Bitcoin has significantly outperformed traditional assets such as the S&P 500 index, gold, and bonds, even surpassing junk bonds, which are considered high-risk, high-return. This indicates that Bitcoin is not only an alternative option but also an important tool for corporate financial strategy.
3.2. Improving Asset Management Efficiency
Another important reason why Bitcoin attracts companies is its efficient asset management characteristics. Bitcoin supports 24/7 trading, providing companies with great flexibility to adjust asset allocation at any time. Moreover, compared to traditional financial institutions, Bitcoin's monetization process is more convenient, free from the constraints of bank operating hours or cumbersome procedures.
Source: Kaiko
Although companies still worry that monetizing Bitcoin may impact its price, this issue is gradually easing with increased market depth. According to Kaiko data, Bitcoin's "2% market depth" (the total amount of buy and sell orders within 2% of the current market price) has steadily grown over the past year, with an average daily market depth reaching approximately $4 million. This indicates that the liquidity and stability of the Bitcoin market are continuously improving, creating a more favorable environment for companies to use Bitcoin.
3.3. Enhancing Corporate Value
Source: Bitcointreasuries, Tiger Research
Holding Bitcoin is not only a financial choice; it can also significantly enhance corporate value and stock prices. For example, after announcing Bitcoin acquisitions, both MicroStrategy and Metaplanet saw substantial increases in their stock prices. This strategy serves as an effective marketing tool in the digital asset industry while providing companies with a pathway to seize growth opportunities in this sector.
4. The Investment of Asian Companies in Bitcoin is Increasing
Source: Bitcointreasuries, Tiger Research
Although Asian companies are still in the early stages of Bitcoin investment, they are gradually increasing their holdings. For example, China's Meitu, Japan's Metaplanet, and Thailand's Brooker Group have regarded Bitcoin as a strategic financial asset. Nexon has also made large-scale Bitcoin purchases. Notably, Metaplanet has been particularly active, acquiring 1,142 Bitcoins in the past six months.
Source: Bitcointreasuries, Tiger Research
However, the participation of Asian companies in the Bitcoin market is still relatively low. According to statistics, the total amount of Bitcoin held by Asian companies accounts for less than 1% of the global total, primarily due to regulatory restrictions in many countries. For example, in South Korea, companies are unable to open accounts at cryptocurrency exchanges and face numerous obstacles in investing in overseas Bitcoin ETFs or launching funds related to cryptocurrency trading. Therefore, these companies can hardly invest in Bitcoin through formal channels.
Despite numerous challenges in the regulatory environment, the participation potential of Asian companies in the Bitcoin market is still promising. Some companies are bypassing regulatory restrictions by establishing overseas subsidiaries for investment. Meanwhile, countries like Japan have also made some progress in relaxing relevant policies. Leading investment cases like Metaplanet are attracting more market attention. These positive changes may pave the way for broader participation of Asian companies in the Bitcoin market in the future.
5. Conclusion
Bitcoin investment is gradually becoming a popular financial strategy adopted by companies. However, its price volatility remains a significant challenge for companies, especially under the influence of external factors like international politics. The market crash in 2022 clearly exposed the potential risks of holding Bitcoin for companies. Therefore, companies should exercise caution when investing in Bitcoin and reasonably pair it with safer assets to reduce overall risk.
Moreover, for Bitcoin to further develop within corporate investment portfolios, a clear institutional framework needs to be established. Currently, there is a lack of clear guidance regarding the holding and valuation of crypto assets, leading to confusion for companies in practical operations. Once these uncertainties are resolved, Bitcoin may play a more significant role in corporate asset diversification.
This article is authorized to be reprinted from: (PANews)
Original Author: D-Tiger Research Institute
'The Trend of Companies Buying Bitcoin! But Asian Companies Hold Less Than 1%, Is Regulation to Blame?' This article was first published in 'Crypto City'
