The news this fall has been full of large companies like MicroStrategy and Square buying lots and lots of Bitcoin — who else is in the game?
Here, we're going to look at where this institutional interest is coming from, exactly who is buying Bitcoin in bulk and examine why they're so fascinated with this asset class.
Do Institutional Investors Know About Crypto?
First though, here are some interesting facts that reveal institutional investor attitudes towards crypto assets in general:
- Paul Tudor Jones, a renowned hedge fund manager, gave BTC a huge PR boost in May when he said the cryptocurrency was "the fastest horse" in the race for profits.
- Coinbase said it witnessed a "noticeable uptick" in demand from institutional investors in the first half of 2020.
- A Fidelity survey suggests 36% of institutional investors in the U.S. and Europe own crypto assets.
- Separately, a poll commissioned by Evertas suggests 26% of institutional investors believe pension funds, family offices and sovereign wealth funds are going to start embracing digital currencies "drastically" going forward.
- 39% of retail investors polled by Grayscale Investments said COVID-19 had made Bitcoin more appealing as an asset class.
Who Is Buying Bitcoin?
Let's take a look at the biggest institutional investors who have been embracing Bitcoin's volatility since the halving took place.
1. Grayscale Bitcoin Trust
The Grayscale Bitcoin Trust has the biggest allocation of BTC among institutional investors by far — but this hasn't stopped other companies, such as MicroStrategy, throwing sizable amounts of cash behind this cryptocurrency either.
MicroStrategy recently decided to use Bitcoin as its primary treasury reserve asset. The company has bought a total of 38,250 BTC at the time of writing in November 2020, purchasing them for an average of $11,111 each.
The price it paid for this Bitcoin is significant. Since the beginning of 2017, MicroStrategy had reported a net income of $78 million for its business operations. But just two months of holding BTC has resulted in a gain of $100 million after the price of Bitcoin neared $14,000. Further inflows are expected as other institutional investors try to emulate this strategy.
3. Galaxy Digital Holdings
Last but not least, let's mention Square. Founded by Jack Dorsey, who is also the CEO of Twitter, the company announced that it had purchased 4,709 BTC for $50 million in October 2020. Just a few weeks after this acquisition, the cryptocurrency stockpile was paying dividends, and was worth $15 million more.
Who Owns the Most Bitcoin?
The Winklevoss Twins
Tyler and Cameron Winklevoss are some of the biggest names (and tallest people) in Bitcoin. The twins — who first entered the public eye after a very public legal battle with Mark Zuckerberg over the invention of Facebook — are now more famous for the size of their Bitcoin holdings. The Winklevii claim that they own more than 1% of the circulating supply of Bitcoin, after buying $11 million in Bitcoin back in 2013.
Roger Ver is one of the original cryptocurrency personalities — his nickname is “Bitcoin Jesus.” Back in 2011, Ver was one of the first investors in Bitcoin-based startups, like Charlie Shrem’s Bitinstant. While he is now known as a proponent of Bitcoin Cash, which he began publicly backing after the Bitcoin hard fork over block size, Ver also has a sizable amount of Bitcoin due to his early entrance in the crypto space (rumored to be over 100,000 BTC).
Satoshi Nakamoto (the Satoshi Stash)
More to Come for Crypto?
As the global economy continues to suffer because of coronavirus, it's likely that we'll see more institutional investors enter this space. These allocations often grab headlines in respected financial publications such as Bloomberg and Forbes — and regulators are beginning to catch up with the crypto industry, introducing regulations that allow companies to acquire digital assets for the first time.