Public companies, trusts, and exchange-traded products currently hold nearly 7% of Bitcoin supply

19 public companies hold more than $6.5 billion worth of Bitcoin, close to 1% of the total market value of the crypto asset. In addition, exchange-traded products (ETPs) and closed-end trust funds hold 5.75% of the Bitcoin market value.

These data were found in a new study by Nickel Digital Asset Management. The total market value of these 19 companies exceeds $1 trillion, 13 of which are in North America, 3 in Europe, and the remaining 3 in Turkey, Hong Kong and Australia. There are also 17 listed companies that have also purchased Bitcoin, but it is not clear what their specific configuration is.

The study shows that institutional adoption of cryptocurrencies is on the rise, with eight public companies buying Bitcoin in the first four months of 2021, compared to just seven in all of 2020.

In addition to listed companies, the study also found that ETPs and trusts hold $43.2 billion worth of Bitcoin, equivalent to nearly 6% of Bitcoin's market value.

According to Hedgeweek, Nickel CEO and co-founder Anatoly Crachilov believes that the combination of the COVID-19 crisis and the central bank’s expansionary monetary policy has heightened the risk of currency devaluation, adding:

“This, combined with the Fed’s increasing inflation guidance and the expanding $18 trillion of negative-yielding global bonds, has prompted many companies to consider allocating capital to alternative assets.”

Nickel’s research, conducted before the recent market downturn, suggests that institutional cryptocurrency allocations will continue to grow, with 81% of European wealth managers and institutional investors saying they expect Bitcoin holdings in corporate reserves to increase.

Crachilov claims that as more institutions allocate Bitcoin to their treasuries over time, this will dampen the price volatility of cryptocurrencies. He said: “Increasing allocations of cryptocurrencies by large institutional and corporate players are expected to reduce volatility over time, thanks to the longer-term, stickier types of capital these investors bring, as well as the larger liquidity pools of the crypto ecosystem.”

However, not everyone agrees that institutions are rushing to gain exposure to cryptocurrencies. JPMorgan analyst Nikolaos Panigirtzoglou believes that the recently observed premium in the spot market relative to futures prices suggests that institutional demand is weakening.

According to BitcoinTreasuries estimates, another $13.5 billion worth of BTC (1.8% of Bitcoin’s supply) is held by four private companies: Block.One, the Tezos Foundation, Mt Gox, and Stone Ridge Holdings Group.

The site also estimates that the Bulgarian government holds around $8.5 billion worth of Bitcoin, while the Ukrainian government holds $1.8 billion worth of Bitcoin.