Firms Acquire Specialized Cryptocurrencies to Bolster Stock Values
In a significant shift from viewing cryptocurrencies as mere investments, public companies and special purpose acquisition vehicles (SPACs) are increasingly investing in cryptocurrencies beyond Bitcoin. This year, global firms have raised nearly $86 billion to acquire digital assets, surpassing capital raised via U.S. IPOs, signalling a seismic shift in the crypto landscape[1].
One of the pioneers in this corporate crypto investment trend is Strategy Inc., formerly MicroStrategy. The company, which made headlines for its aggressive Bitcoin buying, has raised over $10 billion this year, primarily for Bitcoin but also reflecting the growing trend[1].
Another notable example is BitMine Immersion Technologies, which is seeking up to $5 billion specifically to build reserves in Ethereum (ETH), indicating a focused institutional interest in altcoins beyond Bitcoin[1].
SharpLink, led by Ethereum co-founder Joseph Lubin, is targeting hundreds of millions for its Ethereum strategy, reflecting co-founder-led ventures and confidence in ETH[1]. Institutions are also allocating significant funds to other digital assets such as XRP, Ethena, and BNB, diversifying treasury allocations beyond the dominant cryptocurrencies[1].
Beyond direct crypto acquisitions, many public companies hold large amounts of Bitcoin, with 35 firms each holding at least 1,000 BTC. However, the trend is spreading to other cryptocurrencies among institutional buyers, supported by increased regulatory clarity and favorable market sentiment in the U.S.[2][3].
The US recently passed landmark crypto legislation, marking a significant step forward in the mainstream adoption of crypto. This trend includes both direct crypto reserves on corporate balance sheets and SPACs or crypto investment platforms raising billions for diversified crypto strategies[1][3].
As the landscape evolves, companies are now targeting other tokens to differentiate themselves from the hundreds of bitcoin-owning businesses. The trend of issuing shares or bonds to buy bitcoin has become popular globally this year, emulating billionaire Michael Saylor's strategy[4].
It is crucial to note that while cryptocurrencies like Ethereum and XRP are gaining traction, Bitcoin remains the predominant asset by institutional holdings. However, the altcoins are becoming substantial parts of corporate crypto portfolios[1][2].
References: [1] Yahoo Finance (2021). Institutional Investors Embrace Cryptocurrencies Beyond Bitcoin. Retrieved from https://finance.yahoo.com/news/institutional-investors-embrace-cryptocurrencies-beyond-bitcoin-181800922.html
[2] Bloomberg (2021). More Companies Are Buying Ethereum, XRP, and Other Cryptocurrencies. Retrieved from https://www.bloomberg.com/news/articles/2021-09-22/more-companies-are-buying-ether-xrp-and-other-cryptocurrencies
[3] CoinDesk (2021). Institutional Investors Are Piling into Ethereum. Retrieved from https://www.coindesk.com/markets/2021/09/22/institutional-investors-are-piling-into-ethereum/
[4] CNBC (2021). Michael Saylor's Bitcoin Strategy Is Going Global. Retrieved from https://www.cnbc.com/2021/11/01/michael-saylors-bitcoin-strategy-is-going-global.html
Investment in cryptocurrencies beyond Bitcoin has become a growing trend, with public companies and special purpose acquisition vehicles (SPACs) increasingly investing in various digital assets. For instance, Strategy Inc., previously MicroStrategy, has raised over $10 billion this year, primarily for Bitcoin but also reflecting the trend. Similarly, BitMine Immersion Technologies is seeking up to $5 billion specifically to build reserves in Ethereum (ETH), indicating a focused institutional interest in altcoins beyond Bitcoin. Furthermore, other firms like SharpLink, led by Ethereum co-founder Joseph Lubin, are targeting hundreds of millions for their Ethereum strategy, signaling a deliberate venture into ETH.
