Key takeaways:
- 1.2 million Bitcoin, which represents 6% of the total supply is held by asset managers, public companies, private investors and countries
- Corporate investors have changed their tune about crypto and are now getting involved by establishing Bitcoin funds and adding BTC to their balance sheets
- The current trend of corporate funds flowing into crypto is just getting started and will drastically pick up the pace once Bitcoin ETF is approved in the US
For a long period of time institutional investors have been wary of adding Bitcoin to their portfolios and in some instances publicly criticized the world’s biggest crypto. In 2017, for example, JPMorgan CEO Jamie Dimon famously proclaimed Bitcoin a “fraud and called it “worse than tulip bulbs.” Since then much has changed.
How the tables have turned…
As the market matured and it became obvious to everyone that cryptocurrencies are here to stay, Dimon backtracked his initial statement and admitted that bank’s clients are getting ever more interested in investing in Bitcoin and other cryptocurrencies. Earlier this year, JPMorgan started providing Bitcoin exposure to its wealthy clientele.
Data collected by Buy Bitcoin Worldwide provides interesting insights into the world of institutional adoption. Asset managers now hold about 4% of total Bitcoin’s supply, with the biggest share being held in the hands of Grayscale Bitcoin Trust, which controls approximately three-quarters of it. This makes Grayscale by far the biggest institutional BTC holder, as it holds 3.12% of BTC that will ever exist.
Among public companies, the biggest Bitcoin stash has been accumulated by MicroStrategy that holds more than 100K BTC worth $4.9 billion at current market rates. Electric car manufacturer Tesla is second on the list with a 20% share of BTC held by publicly traded companies. Tesla’s CEO Elon Musk is arguably the most influential public figure in the cryptocurrency space, with recent survey data showing that he holds sway over 35% of US-based crypto buyers. Altogether, public companies hold 1% of the supply.
A bit less than one percent of BTC is under the management of private companies. By far the biggest share, amounting to 140K BTC is held by Block.One. Interestingly, 260K BTC is distributed among the balance sheets of governments around the world with Bulgaria leading the pack with more than $10 billion worth of BTC.
2021 will be remembered as the year of the institutional investor
In recent months, there were numerous reports and announcements that support the idea that the trend of corporate investors boarding the cryptocurrency train is just getting started. For instance, banking giants Wells Fargo and JPMorgan filed for Bitcoin funds with the SEC earlier in the month. A bit over a week ago, Walmart posted a job advertisement looking for a “visionary leader” to fill the cryptocurrency product lead position.
In its stellar Q2 earnings figures report, Square’s Cash App attributed a big share of its success to a growing interest of its Bitcoin-related services that drove $2.7 billion in gross revenue.
Additionally, as the acceptance of Bitcoin as a gold alternative continues to gain ground, the flow of corporate funds to the largest cryptocurrency is likely to follow suit. Recent data suggest that once Bitcoin ETF is approved by the SEC, Gold ETF outflows to BTC will commence and the rate of institutional adoption will pick up the pace to finally reach its full potential.
