Last year, MicroStrategy surprised the world by announcing that it would be converting some of its cash into bitcoin (BTC). Now, many other companies have taken the plunge by exposing themselves to cryptocurrencies.
Bitcoin is conquering businesses
Over the past 2 years, Bitcoin’s price has moved positively by about 500%, attracting interest from more traditional investors.
As a result, we’ve seen many companies that were previously firmly against Bitcoin change their tune to the queen of cryptocurrencies. JP Morgan, Goldman Sachs or even Black Rock: the world’s largest investment funds are now partially exposed to Bitcoin as well as other crypto-currencies.
However, this exposure to crypto-currencies is not limited to investment funds. For example, MicroStrategy has been accumulating BTC for the past two years. It now owns over 110,000 of them.
MicroStrategy is not the only company to have made this choice. On October 6, Bank of America actually unveiled a list of 20 major U.S. companies with exposure to Bitcoin.
Unsurprisingly, the list includes companies from the financial world, such as Coinbase, JP Morgan, Morgan Stanley and Signature Bank. Other less expected companies are also included. This is the case of Exelon Corporation, NRG Energy, Vistra Energy, Fox Corporation, Warner Music Group or the Walt Disney Company.
Institutions are taking on cryptocurrencies
This is it! After more than 12 years of existence, Bitcoin is finally starting to be recognized by the mainstream financial world.
In the first half of 2021, $17 billion has been invested in cryptocurrencies from investment funds as a result. For comparison, only 5.5 billion had been injected in the whole of 2020.
Same observation on the side of decentralized finance. While DeFi was initially reserved for professional traders and individual investors, the ecosystem is now being taken over by large institutions.
In practice, the share of volume associated with professional traders has dropped from 50 percent to 20 percent between Q3 2020 and Q2 2021. At the same time, the share of large institutions increased from 22% to over 60% in the same time frame.
Some protocols are now opting to open up to the massive influx of these institutional investors. For example, the decentralized lending and savings protocol Aave has announced the launch of Aave Arc, a series of liquidity pools exclusively for institutional investors. Of course, to access these pools, institutional investors must undergo extensive KYC.