FameEX Hot Topics | Surge in Corporate Bitcoin Adoption in 2024

Corporate adoption of Bitcoin has seen a dramatic rise in 2024, according to a new report from River, a U.S.-based financial services company specializing in Bitcoin. The report outlines how businesses are increasingly incorporating Bitcoin into their treasuries and projects this trend will continue. It highlights key data, trends, and future forecasts, reflecting Bitcoin's growing role in corporate financial strategies.

As of August 2024, businesses collectively hold 683,332 Bitcoin (BTC), accounting for 3.3% of the total Bitcoin supply. This marks a significant 587% increase in corporate Bitcoin holdings since 2020, with a 30% rise in just the past year. U.S.-based companies represent 49.3% of these holdings, equivalent to $19.7 billion. Major corporations like Microstrategy and Tether dominate this landscape, with both companies making up 85% of corporate Bitcoin acquisitions in the first half of 2024.

River’s report also notes a substantial 40% growth in publicly traded companies with Bitcoin holdings from September 2023 to August 2024. The forecast predicts that business Bitcoin holdings will increase by between 204 and 519 BTC daily until 2026. Businesses prefer holding real Bitcoin over exchange-traded funds (ETFs) due to regulatory considerations, as ETFs could classify them as investment companies, which would trigger additional reporting and compliance requirements under the Investment Company Act of 1940.

The report emphasizes that, legally, Bitcoin is classified as a commodity, while ETFs are considered securities. This difference is crucial for companies, as owning too many securities can categorize them as investment companies, subjecting them to heightened regulatory scrutiny. River’s findings show that businesses prefer holding actual Bitcoin to avoid these complications and reduce operational costs.

River’s client base has grown by 68% since August 2023, and 70% of these businesses have retained all their Bitcoin holdings, seeing it as a long-term asset. Despite concerns over accounting and tax implications, 95% of River's clients plan to expand their Bitcoin holdings, demonstrating strong confidence in Bitcoin’s role in corporate finance. Companies see Bitcoin as a hedge against inflation and a way to diversify their financial strategies.

The report also provides examples of businesses successfully integrating Bitcoin into their operations. Summerplace Homes uses Bitcoin to mitigate risks from cyclical downturns, while Real Bedford F.C. has adopted Bitcoin as both a treasury asset and a core part of its brand, boosting revenues and expanding its fanbase. River concludes that while Bitcoin adoption as a treasury asset is not yet mainstream, it offers strategic advantages and financial security, driving more companies to explore its potential.

Disclaimer: The information provided in this section is for informational purposes only, doesn't represent any investment advice or FameEX's official view.