According to Cointelegraph, a new report from Bitcoin technology and financial services firm River forecasts that some companies in the United States will increase their exposure to Bitcoin (BTC) over the next 18 months. The report estimates that around 10% of US-based companies are likely to convert 1.5% of their treasury reserves, approximately $10.35 billion, to Bitcoin within this period.
River's analysts highlighted that traditional corporate treasury strategies, which rely on cash and other short-term cash equivalents, are poor stores of value. 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 caused Apple, now a trillion-dollar corporation, to lose $15 billion of its treasury holdings over the last decade.
The 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. The company 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. Saylor’s BTC treasury strategy has caused MicroStrategy to significantly outperform Warren Buffett’s investment company, Berkshire Hathaway. Since adopting the Bitcoin treasury strategy, MicroStrategy has risen by over 1,000%, while shares of Berkshire Hathaway rose by 104.75% during the same period. Buffett has declined to add Bitcoin to his portfolio or recommend it as a hedge against fiat inflation.
