Matt Hougan’s Note to Investors: Companies Buying Bitcoin Is the Megatrend You’re Missing
In a recent note to investors, Matt Hougan, Chief Investment Officer of Bitwise Asset Management, highlighted a critical and largely overlooked megatrend: companies adopting Bitcoin as a treasury asset. While MicroStrategy often dominates headlines, Hougan emphasizes that this movement extends far beyond a single company and is significant enough to reshape the Bitcoin market in the coming months.
The Bigger Picture
1. MicroStrategy: More Impactful Than You Think
Hougan shines a light on the outsized impact of MicroStrategy’s Bitcoin strategy. In 2024, the company purchased 257,000 Bitcoin, surpassing the total annual supply of newly mined Bitcoin (218,829 BTC). With plans to raise over $42 billion to acquire more Bitcoin, MicroStrategy is setting a remarkable precedent.
Hougan poses a crucial question:
“If a company the size of Chipotle can acquire the equivalent of an entire year’s Bitcoin supply, what happens when a giant like Meta, which is 20x the size, follows suit?”
With Meta and other major companies exploring Bitcoin adoption, the ripple effects could be transformative for the market.
2. Beyond MicroStrategy: The Trend Is Growing
Hougan highlights that while MicroStrategy garners the spotlight, it’s far from alone in this movement. Currently, 70 publicly traded companies hold Bitcoin on their balance sheets, including prominent names like Tesla, Block, Inc., and Mercado Libre. Collectively, these companies hold 141,302 BTC, while private companies like SpaceX and Block.one contribute another 368,043 BTC.
Hougan notes that MicroStrategy now represents less than 50% of the corporate Bitcoin market—a fraction that’s likely to shrink as adoption accelerates.
3. New Accounting Standards Are a Game Changer
According to Hougan, a recent breakthrough could significantly boost corporate Bitcoin adoption: the introduction of ASU 2023-08 by the Financial Accounting Standards Board (FASB).
Previously, Bitcoin was classified as an "intangible asset," requiring companies to write down losses without marking up gains—a major deterrent. The new rules, however, allow companies to mark Bitcoin to market value, unlocking the ability to report gains when Bitcoin appreciates.
Hougan predicts this change will unleash a wave of corporate buyers:
“If 70 companies were willing to buy Bitcoin under the old, restrictive accounting standards, imagine how many will join now that they can fairly recognize its value.”
Why Companies Are Buying Bitcoin
Hougan points out that companies adopt Bitcoin for many of the same reasons individuals do:
Hedge Against Inflation: Protecting cash reserves from fiat devaluation.
Growth Potential: Tapping into Bitcoin’s long-term upside.
Signaling Innovation: Attracting investors and customers by aligning with Bitcoin’s ethos.
Tribal Connection: Joining the Bitcoin movement to demonstrate forward-thinking leadership.
Regardless of motivation, the end result is a growing demand for Bitcoin from companies across industries.
What This Means for Investors
Hougan believes the trend is still in its early stages. With improved accounting clarity and growing corporate interest, Bitcoin adoption at the corporate level could skyrocket. This demand is poised to create significant upward pressure on Bitcoin’s price, transforming it into a cornerstone asset for businesses worldwide.
Final Thoughts: The Time to Act is Now
As Chief Investment Officer of Bitwise Asset Management, Hougan’s message to investors is clear:
“Pay attention to this megatrend. It’s not just about MicroStrategy—it’s a movement, and it’s only going to grow.”
For businesses and investors looking to capitalize on this transformative shift, the time to act is now.
At Bitcoin on Balance, we’re dedicated to helping businesses navigate this megatrend and integrate Bitcoin into their treasury strategies. Visit Bitcoin on Balance for insights and guidance on staying ahead in this evolving market.