A new report from River—a Bitcoin technology and financial services firm—forecasted that some companies in the United States will increase their exposure to Bitcoin over the next 18 months.
According to the report, an estimated 10% of US-based companies will likely convert 1.5% of their treasury reserves, or approximately $10.35 billion, to Bitcoin over the next year and a half.
Analysts for River also pointed out that traditional corporate treasury strategies rely on cash and other short-term cash equivalents, which are poor stores of value. River’s analysis asserted:
“These investments can generate modest returns near the federal funds rate—currently over 5%. However, even these short-term investments often fail to outperform inflation, diminishing the value of a treasury.”
The report noted that this inflationary erosion also caused Apple—now a trillion-dollar corporation—to lose $15 billion of its treasury holdings over the last 10 years.
MicroStrategy’s corporate treasury strategy
The analyst’s forecast points to the growing adoption of a corporate treasury strategy popularized by MicroStrategy founder Michael Saylor.
In June 2024, MicroStrategy completed an additional $800 million debt sale of senior convertible notes at 2.25%, with a maturation date of 2032. MicroStrategy used the funds from the corporate debt to purchase an additional 11,931 BTC.
Saylor has characterized Bitcoin as an asset that guarantees “economic immortality” to corporations and businesses due to its capped supply and a lack of counterparty risk inherent in other stores of value, such as real estate or equities.
MicroStrategy’s second-quarter earnings report revealed that it currently holds 226,500 BTC, valued at approximately $14.7 billion at the time.
Outperforming Warren Buffett—a new era of corporate finance?
Saylor’s BTC treasury strategy caused MicroStrategy to significantly outperform Warren Buffett’s investment company, Berkshire Hathaway. Since the Bitcoin treasury strategy was adopted, MicroStrategy has risen by over 1,000%. Comparatively, shares of Berkshire Hathaway rose by 104.75% during the same period.
Buffett has declined to add Bitcoin to his portfolio or recommend the store-of-value as a hedge against fiat inflation.
