Corporate Bitcoin holders ‘poised to explode’: Bitwise CIO

Matt Hougan told clients that MicroStrategy’s Bitcoin roadmap represents a “true megatrend” that will encourage more companies to adopt BTC as a reserve asset.

Bitwise chief investment officer Matt Hougan predicts an increase in the number of companies adding Bitcoin (BTC) to their treasuries due to MicroStrategy’s influence and changing regulatory headwinds in the US under President-elect Donald Trump’s administration.

In a research note, Hougan said the success of spot BTC exchange-traded funds and growing crypto adoption in the U.S. have helped offset Bitcoin’s previous reputational risks.

Recent changes to accounting rules have provided additional incentives for firms considering adding Bitcoin to their balance sheets. In December, the Financial Accounting Standards Board implemented new reporting requirements under ASU 2023-08.

The updated rules allow institutions to mark declines in Bitcoin prices and adjust their disclosures when the price appreciates. This represents a notable shift from previous rules that required companies to treat Bitcoin as an intangible asset; that is, firms could only record price decreases, with no provision for recording price increases.

It could literally go down if 70 companies were willing to add Bitcoin to their balance sheets from an accounting perspective, imagine how many of them would add this to their balance sheets now. “Two hundred? Five hundred? A thousand?

Matt Hougan, Bitwise CIO

Hougan’s note was shared days before Trump’s inauguration, scheduled for January 20, and hours after MicroStrategy backed the BTC herd. MicroStrategy’s executive chairman, Michael Saylor, said the company owns approximately 450,000 BTC worth over $43 billion and plans to purchase more.

MicroStrategy spent $22 billion to buy 258,320 BTC in 2024; This is more than the total of 218,829 BTC produced by miners for the entire year. Saylor stated that his company plans to purchase an additional $42 billion worth of Bitcoin, which will correspond to approximately three years of newly issued BTC supply.