The year 2020 witnessed the great recovery of bitcoin. During the first half of the year, it traded below $5 000, but its value rose above $20 000 by the year end. It is highly believed that the increase in institutional investment in bitcoin was the primary reason for the surge in its price and the resultant bull run.
This is because cryptocurrencies are emerging into a class asset. As a result of the high yield of bitcoin and its ability to hedge against inflation, there is an increase in the number of Institutional investors. In addition, bitcoin is easy to transport and make micro-payments since it is highly divisible.
Institutional Companies Investing in Bitcoin
Top investors in bitcoins in 2020 include Grayscale, MicroStrategy, Square, Massachusetts Mutual Life Insurance, Ruffer, CoinShares, One River Digital Asset Management, Skybridge Capital, Galaxy Digital Holdings and 3iQ, among others.
MicroStrategy
Investment - $1.125 Billions
MicroStrategy, a business analytics company, invested approximately $1,125 billions in bitcoins in 2020. This company first expressed its interest in bitcoins in August 2020. Interestingly, by year end it had amassed over 70,470 bitcoins, worth over 2,2 billion dollars. This is because MicroStrategy believes that owning bitcoin has better long-term benefits than keeping cash.
Square Inc.
Investment - $50 Million
One of the top companies that invested immensely in bitcoins is Square Inc., a publicly listed financial and merchant service company. In October 2020, it purchased $50 million worth of bitcoins, approximately 4709 BTC. Currently, this amount of BTC is worth around $160 million, representing about 1% of its asset base.
Grayscale investments
Investment - $7.4 Billion
This is the third company that invested heavily in bitcoins in 2020. It is not surprising that it has such a massive interest in bitcoins, considering that it is an asset management company, giving cryptocurrency exposure to many institutions. Its portfolio for institutional investments is over $7.4 billion in BTC, which Grayscale Bitcoin Trust manages. Therefore, mathematically, Grayscale Investments holds over 2% of the total supply of bitcoins.
Massachusetts Mutual Life Insurance
Investment - $100 million
Massachusetts Mutual Life (MassMutual), an insurance company based in the United States, purchased bitcoins worth $100 million in December 2020. It also acquired a $5 million stake in a cryptocurrency service firm, NYDIG.
Galaxy Digital Holdings
Investment - $257 Million
Galaxy Digital Holdings is a cryptocurrency- based merchant bank, which provides innovative investment products. In particular, it deals with asset management, advisory services, trading and principal investments. According to bitcointreasuries.org, the company owns 16 651 BTC, worth more than $257 million.
SkyBridge Capital
Investment - $182 Million
SkyBridge Capital invested $182 million in bitcoins. Accordingly, it prefers bitcoin because they are easy to transfer and are divisible. They also have lower storage costs than gold. Above that, it believes that bitcoin is the best option for investors who want to branch from classic assets such as stocks and bonds.
Ruffer
Investment $745 Million
Ruffer is a British investment manager with over $745 million worth of bitcoins. According to CoinDesk, Ruffer invested 2.5% of its $27 billion portfolio in bitcoins. Its philosophy is that it should invest in an asset (bitcoin) that blends the benefits of gold and technology.
3iQ
Owns - 8,295 Bitcoins
This is a Canadian-based crypto-asset portfolio manager which owns 8,295 BTC, with an estimated value of over $128 million. Its bitcoin fund is listed on Toronto Stock Exchange (TSX) and Gibraltar Stock Exchange. Therefore, many Canadians, among other people, invest in bitcoin through its regulated bitcoin investment managers.
ETC Group Bitcoin ETP
Owns - 5,215 Bitcoins
ETC Group, a London-based company, owns about 5,215 BTC valued at over $80 million in its crypto assets called exchange-traded products (ETP). This is a BTC ETC listed on Deutsche Börse’s XETRA, a German exchange.
CoinShares
Owns - 65,810 Bitcoins
This is another asset management company that offers great exposure to cryptocurrencies through its portfolios. It has two exchange-traded products, Bitcoin Tracker One and Bitcoin Tracker Euro, which track the performance of bitcoin. Investors can access these two products at Nasdaq Stockholm exchange. According to analyst Kevin Rooke’s tracker, as of September 2020, CoinShares owned 65,810 BTC. Essentially, therefore, CoinShares owns about 0.4% of the current circulating supply of bitcoins.
At the press time, one Bitcoin is worth over $35000 which fell down from the $41000 mark. However, the rise in Bitcoin’s market capitalisation influenced the market capitalisation of other cryptocurrencies.
It is interesting that many institutional investors now opt to invest in bitcoins. The bull run that stretches from 2020 to 2021 shows that investing in bitcoins is profitable. With its current price of over $30 000, many institutions shall join the bandwagon by investing in bitcoins, creating a further bullish trend.