These Big Money Players Have Put Bitcoin On The Balance Sheet
The rise in acceptance of Bitcoin (CRYPTO: BTC) as a major store of value and payment option has been influenced by major corporations adding the cryptocurrency to put a portion of its cash reserves into cryptocurrency. Benzinga could earn up to 6% per annum on its crypto holdings.
“Though not without some added risks, through higher interest rates and a bullish outlook on crypto, Benzinga has the potential to generate more cash in the short-term, while also investing in what could prove to be the monetary system of the future,” said Benzinga Director of Operations Luke Jacobi.
Benzinga is making a short-term and long-term investment in digital assets and also following other large companies that have made the decision to put a portion of their cash balance into Bitcoin and other cryptocurrencies.
Here is a look at some of the biggest companies that have done just that.
Tesla Inc (NASDAQ:TSLA): This electric vehicle company invested $1.5 billion in Bitcoin, adding the cryptocurrency to its balance sheet. The purchase was done with cash that was not needed to maintain operating liquidity. Tesla left the possibility open to acquiring additional cryptocurrency down the road in the filing.
The addition of Bitcoin by Tesla marked a big step in institutional adoption with one of the largest companies in the U.S. adding crypto to its balance sheet.
MicroStrategy Incorporated (NASDAQ:MSTR): Business intelligence company MicroStrategy is well-known for buying Bitcoin with its cash reserves. The company has borrowed money to purchase additional Bitcoin, putting an emphasis on how undervalued the cryptocurrency is. In February, MicroStrategy purchased an additional 19,452 Bitcoin for $1 billion. It now holds 90,531 Bitcoin purchased at an average price of $23,985 each.
Square Inc (NYSE:SQ): Digital payment company Square has purchased Bitcoin for the balance sheet twice. The company spent $170 million on 3,138 Bitcoin recently, an announcement made during its fourth-quarter earnings report.
The move followed a prior $50 million purchase. Square now holds around 5% of its cash reserves in Bitcoin.
“Aligned with the company’s purpose, Square believes that cryptocurrency is an instrument of economic empowerment, providing a way for individuals to participate in a global monetary system and secure their own financial future,” the company said.
Time Magazine: Formerly owned by Meredith Corporation (NYSE:MDP) until 2018, Time USA LLC is now owned by salesforce.com inc. (NYSE:CRM) Founder and CEO Marc Benioff. The well-known magazine company announced it would be adding Bitcoin to its balance sheet and partnering with Grayscale Investments, which owns the popular Grayscale Bitcoin Trust (OTC:GBTC), on a series of educational videos about cryptocurrency.
Why It’s Important: There is a growing push for institutions to put 1% to 5% of cash reserves into cryptocurrency.
Square CFO Amrita Ahuja told Fortune that Bitcoin could be essential to companies' balance sheets.
“There’s absolutely a case for every balance sheet to have Bitcoin on it. We see Bitcoin and cryptocurrencies as expanding access to financial services,” Ahuja said.
More large companies will likely be the subject of Bitcoin purchasing rumors as the 2021 earnings season progresses.
(Photo: André Francois McKenzie via Unsplash)
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