How Much Bitcoin Does Wall Street Own?

Original title: How Much Bitcoin [BTC] Does Wall Street Own?
Original article by Bhushan Akolkar
Original translation: 0x13, BlockBeats

Top companies that have joined the Bitcoin investment track include MicroStrategy, Square Inc., Stone Ridge Asset Management and GrayScale. On October 31, the king of cryptocurrencies, Bitcoin, celebrated the 12th birthday of the release of the Bitcoin white paper. The price of Bitcoin also broke through $14,000 and set the highest monthly closing price in the past 34 months since the 2017 bull run.

Analysts say Bitcoin could break through its all-time high of $20,000 within the next year, driven by a massive influx of funds from Wall Street.

2020 was a year of major changes in the global economic landscape, and investors remained in a risk-averse mode. The COVID-19 pandemic dealt a severe blow to businesses and the global economy, and with Europe beginning its second phase of lockdown and another wave of outbreaks in the United States, the hard times are far from over.

In this context, Bitcoin is the most attractive as a potential hedge against falling interest rates and rising inflation. Bitcoin, also known as "digital gold", has successfully influenced the investment decisions of Wall Street giants in the past few months.

With recent moves, Bitcoin has also distanced itself from traditional assets like gold and continued to gain dominance. Bitcoin critics and Wall Street giants have finally had to admit that millennials clearly prefer to accumulate Bitcoin rather than gold.

Wall Street giants hold a lot of Bitcoin

So far, four Wall Street giants have invested in Bitcoin. Here are the details of their Bitcoin holdings and future plans.

MicroStrategy

As of the third quarter of 2020, MicroStrategy owned a total of 38,250 BTC, with an average purchase price of US$11,111 per Bitcoin.

Some of the biggest institutional money from Wall Street has been pouring into Bitcoin over the past few months. Business intelligence company MicroStrategy kicked off the movement by putting nearly $500 million of its idle cash into Bitcoin.

MicroStrategy purchased a total of $425 million in Bitcoin. Through this large-scale holding of BTC, MicroStrategy controls a full Bitcoin node, accounting for 0.02% of the total Bitcoin supply.

However, at the current price of BTC, these bitcoins are worth nearly $515 million, which means that the company has achieved a return of more than 20% in a very short period of time. Interestingly, MicroStrategy's investment in BTC has earned a return of about $100 million in a very short period of time, while MicroStrategy's investment return over the past three years has only been about $77 million.

MicroStrategy reported its strongest quarterly results in years (Q3 2020), with its market share jumping 60% from the bottom of 2020. The company's CEO and Bitcoin advocate Michael Saylor recently said that he personally owns more than 17,000 Bitcoins, with a total purchase amount of nearly $240 million.

Square Inc

Last month, Jack Dorsey-backed Square invested $50 million in Bitcoin. The company claimed to have purchased more than 4,700 BTC at an average price of $10,617.96 per BTC.

Although it only accounts for 1% of Square's total assets under management, the shift in Square's strategy from investing in traditional assets is clear. Jack Dorsey has called Bitcoin a global currency on multiple occasions, and he remains bullish on the future of Bitcoin. Square Cash App is popular among millennials for its ability to purchase Bitcoin, so it's no surprise that the company is moving into Bitcoin.

Stone Ridge Asset Management

Another big name from Wall Street, Stone Ridge Asset Management, reported that it holds more than $100 million worth of Bitcoin as its “primary treasury reserve asset.”

Earlier this month, Stone Ridge subsidiary NYDIG announced that it had raised more than $50 million in growth equity financing. NYDIG is one of the leading providers of Bitcoin solutions for “institutional allocators, corporations, investment advisors and high net worth individuals.” Currently, NYDIG manages two large Bitcoin funds, each with more than $150 million.

Grayscale

When we talk about such famous companies, we can’t leave out Grayscale.

Grayscale’s latest digital asset investment report states that Grayscale Bitcoin Trust saw more than $700 million in institutional funding growth in the third quarter ending in September. Bitcoin Trust has seen a surge of more than 150% in institutional funding this year.

Grayscale Bitcoin Trust, which alone accounts for 82% of the company’s total assets under management (AUM) of $7.3 billion, has also received a large inflow this month. Grayscale has been actively carrying out the “Drop Gold” campaign to attract more people to invest in Bitcoin.

Who's next?

It looks like we are slowly getting into Bitcoin investing and there will be no looking back. Former Goldman Sachs hedge fund manager Raoul Pal recently predicted that giants like Microsoft and Apple may enter BTC.