Following Tesla Investments into cryptocurrencies poster-child Bitcoin, there has been a lot of interest in Bitcoin, especially from corporations wondering how to incorporate it into their portfolio/ stock.
Major Signals
- Institutional investors up for over 90% of their investors in Q2020.
- Companies like Tesla, Microstrategy, and Twitter's recent gains and interest serve to solidify interest in Bitcoin as interest.
- The question most corporations ask has changed from nay-saying to a possibility.
Michael Sonnenshein, Grayscale's CEO, told Squawk Box in an interview yesterday, February 10th, that he believes there is about to be an increased demand from corporations following Tesla's announcement of its 1.5 billion dollar investment in Bitcoin.
He voted his own company's record peak asset performance in 2020 as evidence. Grayscale is the largest digital currency asset manager worldwide. In 2020, the company started the year with $2.0 billion in investment and, by the end of the 4th Quarter of 2020, had $20.2 billion, an increase of over 900%. Its Bitcoin Trust was responsible for 87% of all influxes into its product family.
He said that most of the companies were very interested in Bitcoin and wanted to invest bit by bit instead of fully diving into the crypto market.
He said that most interested investors were not bothered by the regulatory concerns or lack of it. According to him, they had enough clarity concerning bitcoin regulations. He said that many of them understand how much regulatory clarity has been provided around crypto market investments. Some of them, he reported, were ready to invest from 0.25% of their gross cash holdings to 1.0-2.0%.
Companies like Microstrategy and Tesla are championing corporations' adoption of cryptocurrency as a substantial investment. Just last week, Microstrategy rounded up some representatives of close to 1,500 firms and held a webinar on bitcoin. There were reportedly some 1,400 signups. Tesla and, more recently, Twitter have indicated the possibility of adding bitcoin to their balance sheets. That means accepting bitcoin for their products and services and may be paying employees in said cryptocurrency.
He says inflows from institutions have been on the increase in 2021. The question has changed from 'why' to 'why not'? He says and sees more companies having an interest in acquiring Bitcoin as part of their treasury program.
