It’s not just MicroStrategy; it’s a bona fide megatrend, and it’s big enough to tilt the bitcoin market significantly upward this year.

One of things I try to do in this weekly memo is highlight things that I think conventional wisdom gets wrong. Here’s one:

What MicroStrategy is doing isn’t getting enough attention.

I know what you’re thinking: “Not enough attention? The company and its founder, Michael Saylor, are plastered all over the media.”

That’s true. But most investors I speak with seem to think of the company as a one-off, a singular entity with a singular founder doing a singular thing.

That’s wrong.

I’ve spent the past few months digging into the idea of companies buying and holding bitcoin as a treasury asset, and I’ve come away thinking that this is a much bigger trend than most people realize. In fact, I think it’s a bona fide megatrend.

My prediction: We’ll see hundreds of companies buy bitcoin for their treasuries over the next 12-18 months, and their purchases will lift the entire bitcoin market substantially higher.

Here are three reasons this trend is a much bigger deal than most people think.

Reason 1: MicroStrategy Alone Is Bigger Than You Think

MicroStrategy’s not a particularly big company. It’s currently ranked 220th globally by market cap, a bit bigger than Chipotle and a bit smaller than Sherwin-Williams, the paint company.

Last year, MicroStrategy bought ~257,000 bitcoin. Is that a lot? A little?

Well, to put that number in perspective, it was more than all the bitcoin mined in 2024 (218,829 BTC).

Let me say that again: A company the size of Chipotle bought more than 100% of the entire new supply of bitcoin in 2024.

It’s not done, either. MicroStrategy recently announced plans to raise more than $42 billion to acquire more bitcoin. At current prices, that’s about 2.6 years’ worth of new supply.

So ask yourself this: What happens if really big companies start to take a page from MicroStrategy’s book? Meta—which is currently considering a shareholder suggestion to add bitcoin to its balance sheet—is 20x the size of MicroStrategy.

Reason 2: The Trend Is Already Bigger Than MicroStrategy

MicroStrategy gets all the press, but it’s hardly alone. Today, 70 publicly traded companies own bitcoin on their balance sheets, and many private companies do as well (including Bitwise, by the way).

The public-company list includes well-known crypto companies like Coinbase and Marathon Digital, as well as non-crypto companies like Block, Tesla, Semlar Scientific, and Mercado Libre. Together, these companies—excluding MicroStrategy—own 141,302 BTC.

Private companies aren’t required to report their holdings, but the ones who have done so voluntarily (SpaceX, Block.one, etc.) own at least another 368,043 BTC, according to BitcoinTreasuries.com.

That’s significant. It means that, even today, MicroStrategy is less than 50% of the corporate BTC market. I suspect it’ll be a small fraction of it eventually.

Reason 3: The Number of Companies Buying Bitcoin Is Poised To Explode

The reason I’m writing this memo today is that I believe the number of companies that own bitcoin on their balance sheets is going to explode.

The reason? Until the start of this year, two factors prevented companies from joining this trend.

The first was reputational risk. Last year, the CEO of one large publicly traded company faced huge hurdles in adding bitcoin as a treasury asset. The company risked negative media coverage, shareholder lawsuits, regulatory attention, and more, and the board just wasn’t having it. The same constraints that kept institutional investors from allocating to bitcoin for years have weighed on companies as well.

But reputational risks have peeled back significantly in the past few months. Post-election, with Washington embracing crypto at the highest levels, it’s becoming much more commonplace—and popular—to own bitcoin. This alone should cause the number of companies buying bitcoin to double.

But there’s a second, bigger factor at work.

Starting in December, the Financial Accounting Standards Board (FASB)—which governs how publicly traded companies report financials—implemented a new rule called ASU 2023-08 that changes how bitcoin is accounted for in GAAP reporting.

Prior to the start of this year, bitcoin was treated under GAAP as an “intangible asset” subject to “impairment testing.” That meant companies that bought bitcoin had to mark its value on their books upon purchase and then write down the value if the price fell. But if the price rose, they were not allowed to mark the value back up.

I know that sounds crazy, but it’s true. Under ASU 2023-08, however, that changes. Now, if bitcoin’s price goes up, companies can mark the value to market and book a profit.

If 70 companies were willing to add bitcoin to their balance sheets when, from an accounting perspective, it literally could only go down, imagine how many will add it to their balance sheet now. Two hundred? Five hundred? A thousand?

Conclusion: Why Companies Buy Bitcoin

The reason many people are skeptical of this trend is they get hung up on the question of why companies buy bitcoin.

We all know why MicroStrategy does it—it’s the company’s primary mission. But why would a thriving medical equipment company like Semlar Scientific join in?

I’ve asked myself this question many times over the past few months. But then, one day, it dawned on me: Companies buy bitcoin for the exact same reasons individual investors do.

Some companies are greedy, hoping that adding bitcoin to their balance sheet will drive the price of their stock higher. Others are worried about the debasement of the dollar, and want to protect their cash from long-term destruction. Still others want to signal that they’re part of the bitcoin tribe, hoping to attract customers. Some probably just have a hunch.

There are many reasons, but in the end, it doesn’t matter. As an investor, you don’t have to know why every company buys bitcoin any more than you need to know why every institution, financial advisor, and retail investor does. You just need to look at the numbers and ask yourself two questions: Where does all of this demand from companies look like it’s going? And what would that mean for the market?

Risks and Important Information

No Advice on Investment; Risk of Loss: Prior to making any investment decision, each investor must undertake its own independent examination and investigation, including the merits and risks involved in an investment, and must base its investment decision—including a determination whether the investment would be a suitable investment for the investor—on such examination and investigation.

Crypto assets are digital representations of value that function as a medium of exchange, a unit of account, or a store of value, but they do not have legal tender status. Crypto assets are sometimes exchanged for U.S. dollars or other currencies around the world, but they are not currently backed nor supported by any government or central bank. Their value is completely derived by market forces of supply and demand, and they are more volatile than traditional currencies, stocks, or bonds.

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