What if The Top 10 Public Companies with the Most Cash Bought Bitcoin?
Corporate adoption of Bitcoin is inevitable. With the dollar’s value melting away and interest rates poised to go negative, everyone — both individuals and corporations alike — are looking to preserve the value of their cash.
With companies like MicroStrategy making a bold $450 million dollar plus play to preserve its cash holdings in what CEO Michael Saylor referred to as a “melting ice cube” and Twitter putting its toe into the Bitcoin water with a relatively mild (by comparison) $50 million investment, Bitcoin has all of the sudden caught the attention of corporate America.
And this is just the beginning.
So what if corporate America (or the rest of the world for that matter) rush in to embrace Bitcoin because their iceberg sized mound of cash is melting so fast it’s flooding the streets around its corporate headquarters and heading straight into the sewer drain?
The table above, while based on numbers from 2019, shows the top 10 public companies in the US have significant cash holdings in their respective treasuries. Given the current economic climate, companies are looking for ways to preserve cash — or should I say value.
Bitcoin has suddenly emerged as the knight in shining armor. With a finite supply, creeping inflation, and increasing demand from the average Joe and corporations alike, Bitcoin’s appeal has never been greater.
As of this writing, the total Bitcoin supply in circulation is approximately 18.5 million. And with only 21 million in the total supply of Bitcoin (the last Bitcoin won’t be mined until approximately 2140), this makes the king of cryptocurrency even more appealing.
So what happens when (not if) these top companies (and others) decide to move a portion of its cash holdings, say 10%, to Bitcoin?
The numbers are mind-blowing. If the top 10 companies invest 10% of their cash holding into Bitcoin, they will control over 27% of the current market supply. And on a fully-diluted basis, nearly 25% of all the Bitcoin that will ever be mined.
So this begs the question, what would it take for these same companies to try to corner the Bitcoin market and buy all of the Bitcoin currently in circulation? What would it take?
Incredibly, if the top 10 public companies in the US with the most cash invested 36% of its cash into Bitcoin, it would buy all of the Bitcoin currently in circulation. While it’s not likely that any of these companies would allocate 36% or more of its cash to Bitcoin, it illustrates the finite nature and significant store of value Bitcoin is.
What’s even more incredible to comprehend is that if this level of investment was done by these companies, the return on investment (ROI) is even more shocking. Depending on what price appreciation model you subscribe to (be it Stock-To-Flow or anything else), pundits and analysts have placed a late 2021 price target on Bitcoin from anywhere from $100,000 to $250,000 per Bitcoin.
If you assume a Bitcoin price of $150,000 in late 2021, the ROI for these top 10 companies is even more remarkable.
If the top 10 companies in the US invested 10% of its cash reserves into Bitcoin, based on a late 2021 BTC price target of $150,000, they would double the size of their cash in treasury.
This is the power (and beauty) of Bitcoin. Now, none of this is likely to happen anytime soon. And of course, this level of increased demand coupled with finite supply means the price of Bitcoin should rise relatively high. MicroStrategy was able to acquire a significant amount of Bitcoin without significantly driving the price higher. Other companies will likely not be so lucky.
If there was ever a time to buy and HODL Bitcoin, it’s now.
About The Author
Mitchell Koulouris is a Bitcoin analyst and pundit. You can contact Mitchell at firstname.lastname@example.org.