Corporate Investment in Bitcoin

The trend of corporates putting bitcoin on their balance sheets is expected to grow into 2025, according to Jake Ostrovskis, an analyst at market-making firm Wintermute.

Ostrovskis noted, “I think that is now going to be quite a big driver next year when you get the corporates coming in on top of the institutions, and their own institutional base of listed companies that are trying to get exposure.” He also added that SMEs (small and medium-sized enterprises) are likely to enter the market as well.

In recent years, MicroStrategy has made headlines by purchasing $10 billion worth of bitcoin, with plans to acquire an additional $42 billion, leveraging its equity to do so.

Ostrovskis highlighted bitcoin mining companies like Mara and Riot as examples of following MicroStrategy's model by issuing convertible notes to fund bitcoin purchases. Recently, Metaplanet announced plans to raise $31.8 million through bond issuance to accelerate its bitcoin buying strategy.

The primary goal behind these corporate investments is to enhance company balance sheets and drive stock prices higher, a tactic Ostrovskis refers to as the ‘MicroStrategy strategy.’

Furthermore, Ostrovskis emphasized that while discussions focus on ETFs and the involvement of pension funds and sovereign wealth funds, there is a significant amount of capital in corporates that is more agile, potentially leading to quicker moves into bitcoin.

He mentioned that traditional hedge funds, initially waiting on ETFs for crypto access, are now actively exploiting market opportunities. “People are leaning into crypto not as natives but as traditional institutions applying old strategies they used in equities to crypto,” he stated, reflecting on the current market flows.

Ostrovskis believes that some companies might soon adopt a similar strategy to MicroStrategy but with ether instead. “It's probably only a matter of time until someone does the equivalent and turns themselves into like an Ethereum investment vehicle. At that point, you turn into the MicroStrategy of that world.”