Companies holding bitcoin on balance sheets lose nearly $7 billion

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Companies with bitcoins on their balance sheets suffered massive losses as a result of the crash. Those companies that gradually added BTC to their holdings had made profits in the billions when the price of the cryptocurrency rose. However, since the downtrend that caused bitcoin to lose around 50% of its value, they have now seen billions of dollars shaved off their balance sheets collectively.

Loss of 7 billion dollars for companies

Publicly listed companies have cautiously but surely increased their bitcoin holdings over time. In August 2021, it was reported that institutional investors held nearly 10% of the total BTC supply. Since the supply of BTC is limited, this volume is important, especially when institutional market entry is still in its infancy.

Related Reading | MicroStrategy isn’t done buying Bitcoin, CFO reveals

As the price of BTC climbed, the value of BTC held by companies also increased. At some point, reaching almost as high as 100% returns for some and exceeding that for others. But as with any market, an uptrend can’t last forever and with the crash that rocked the market at the end of last year, institutional investors are seeing the value of their holdings decline.

From November 2021 to January 2022, publicly traded companies with bitcoin on their balance sheets lost nearly $7 billion of their BTC holdings. Much of this lost value was saved by the top players in the space, MicroStrategy, Tesla, Galaxy Digital and Block.

The decline in value, however, has not shaken any of the companies that believe in the digital asset. Most remain committed to holding bitcoin for the long term, and others like MicroStrategy have said they will continue to buy BTC in the future.

Companies are getting bullish on Bitcoin

Some of the companies that hold bitcoin on their balance sheet are known to the general public. Others are much lesser known but still hold significant amounts of bitcoin on their balance sheets. These include publicly traded companies such as MicroStrategy, Tesla, Galaxy Digital, Jack Dorsey’s Block (formerly Square), among others.

BTC recovers to $37,000 | Source: BTCUSD on TradingView.com

Over the years, these companies have taken a more positive view of BTC, choosing to invest in the digital asset over others, as in the case of MicroStrategy. These companies have one thing in common, however, and that is bitcoin maximalists at their helm.

Related Reading | How This Bitcoin Movie Club Will Give New York Residents A Chance To Get BTC

MicroStrategy, the publicly traded company with the largest BTC holdings in the world, is led by Michael Saylor, a well-known BTC bull. Saylor himself said he personally owned BTC, long before his company did, using his own returns as evidence of why the digital asset was a good bet.

Tesla is the publicly traded company that holds the second-largest bitcoin wallet. Today, Tesla is run by billionaire Elon Musk. Musk has never been one to hide his affinity for BTC and other cryptocurrencies. It is therefore not surprising that the automaker revealed that it held BTC in its balance sheet.

Galaxy Digital and Block are led by bitcoin maximalists Anthony Scaramucci and Jack Dorsey. These companies rank third and fourth among the companies with the largest bitcoin holdings in the world. These top four companies hold nearly 200,000 BTC between them, totaling around $6.9 billion at current prices.

Featured image from Forbes, chart from TradingView.com

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