In recent times, the cryptocurrency market has experienced a significant surge. Driven by strong bullish sentiment, Bitcoin's price briefly surpassed $35,000 and is currently hovering around that level.
While retail investors celebrate BTC's upward movement, it's worth shifting our focus to the "big players" in the market—the institutional investors.
After this substantial rally, what is the status of the investment positions of the many traditional institutions that once brought joy to the crypto market? Are these institutional holdings now in profit or still at a loss?
According to data from Coingecko, there are currently 28 publicly listed companies worldwide holding Bitcoin, with a combined total of 239,494 BTC. This amounts to approximately 240,000 BTC, with a total market value of around $8.1 billion.
Beyond corporations, sovereign nations are also notable "investors" in cryptocurrency. Whether by active choice or through judicial proceedings, they hold significant amounts of Bitcoin, with El Salvador being the most famous example.
The following sections detail the Bitcoin holdings of major institutions and nations.
Key Institutional Bitcoin Holdings
Among the 28 publicly listed companies, 16 hold more than 500 Bitcoin. Additionally, 4 sovereign nations also possess holdings exceeding 500 BTC.
The United States Government
The U.S. government is perhaps the most notable entity among Bitcoin whales. It is neither a crypto investor nor a financial institution, yet it has inadvertently become a leading holder of Bitcoin in the digital currency world. Interestingly, it remains indifferent to the price fluctuations of this asset.
Jarod Koopman, Director of the Cyber and Forensic Services division of the IRS, has publicly stated, "We don't play the market. We're basically set up to follow our process."
Unlike other whales who accumulate Bitcoin through purchases, the U.S. government's holdings largely come from forfeitures. Just three recent seizures added over 200,000 BTC to government coffers. Previously, the U.S. government sold approximately 20,000 BTC, and each such "liquidation" has caused significant turbulence in the crypto market.
Coingecko data indicates that the U.S. currently holds over 207,000 BTC, valued at approximately $7.19 billion. For context, the renowned Bitcoin "enthusiast" firm MicroStrategy holds just 158,000 BTC.
MicroStrategy
Unrealized Gain: Approximately $816 million (17.4%)
MicroStrategy was among the first publicly listed companies in the U.S. to acquire large amounts of Bitcoin and remains the largest corporate holder. From August 2020 to the present, MicroStrategy has announced 28 separate BTC purchases, accumulating 158,245 BTC at an average cost of $29,582 per coin.
The company is well-known not only for the scale of its acquisitions but also for its steadfast "diamond hands" approach to holding—never selling any BTC through multiple market cycles.
According to Coingecko, the company's BTC holdings currently show an unrealized gain of $815,584,823, about $816 million, representing a 17.4% profit.
Since MicroStrategy's first Bitcoin purchase in August 2020, Bitcoin has surged 147% in value. During the same period, the S&P 500 rose 26%, the Nasdaq increased by 18%, while gold fell 3%, silver dropped 19%, and bonds declined 24%. Undoubtedly, Bitcoin has been the top-performing asset class, rewarding MicroStrategy's conviction handsomely.
Beyond its holding strategy, an intriguing anecdote about MicroStrategy is the perceived market impact of its purchases. Following each acquisition announcement, social media often buzzes with bearish sentiments, suggesting that "when MicroStrategy buys, the market is about to drop."
Tesla
Unrealized Gain: Approximately $364 million (8.5%)
When it comes to the most influential figure in the crypto market, most investors would point to one man: Elon Musk, CEO of Tesla and SpaceX, and self-proclaimed "CEO of Dogecoin." Whenever Musk comments on crypto, the market often experiences sharp volatility.
Led by Musk, Tesla has deeply engaged with the crypto market, acquiring a substantial amount of Bitcoin. In mid-October, Tesla released its latest financial report, revealing that the company did not buy or sell any Bitcoin in the third quarter. This marks the fifth consecutive quarter without any change in its BTC holdings.
Coingecko data shows that Tesla holds approximately 10,500 BTC, with a current market value of around $364 million.
Bitcoin Mining Companies
Marathon Digital Holdings: Unrealized Gain ~$461 million (144%)
Bitcoin mining companies represent a unique category among institutional holders. Firms like Marathon Digital Holdings and Hut 8 operate on a business model that involves self-mining and long-term holding of BTC as an investment.
A significant portion of their Bitcoin comes from self-production rather than open market purchases, resulting in a much lower average cost per coin. In terms of returns, Marathon leads with an impressive 144% unrealized gain on its BTC holdings.
Marathon was incorporated in Nevada in 2010 under the name Verve Ventures, Inc. In 2017, the company purchased digital asset mining equipment and established a data center in Canada. However, it ceased Canadian operations in 2020, consolidating all activities in the U.S. before expanding its Bitcoin mining efforts domestically and internationally. The company rebranded as Marathon Digital Holdings, Inc. on March 1, 2021.
Its primary business is proprietary Bitcoin mining. The strategy involves raising capital to purchase mining hardware, deploying it in mining facilities, covering operational costs with fiat currency, and holding the mined Bitcoin as a long-term investment.
Hut 8 is a Canadian Bitcoin mining company focused on utilizing advanced hardware and data center resources for mining operations. It is one of North America's largest publicly traded Bitcoin mining firms. Beyond mining, Hut 8 offers other crypto-related services and solutions, such as high-performance computing.
The company typically sets up mining facilities in regions with low energy costs, such as remote parts of Canada, to reduce operational expenses and enhance efficiency, maintaining competitiveness in the highly competitive crypto mining sector.
An interesting observation is that while Bitcoin itself has delivered substantial returns lately, stocks of Bitcoin mining companies have often outperformed BTC. According to CoinGecko data, with the exception of Argo Blockchain and TeraWulf, all crypto mining stocks have year-to-date returns surpassing Bitcoin's 84.61%, averaging around 150%. This further underscores the market's optimistic sentiment toward Bitcoin.
Meitu
Unrealized Loss: Approximately $16.86 million (-34.1%)
Meitu is the only Chinese company featured in this overview. Currently, its combined holdings of BTC and ETH show an unrealized loss of $16,855,368.
Last month, Meitu released its interim performance report for 2023. The report indicated that the company's revenue reached HK$1.261 billion in the first half of the year, a year-on-year increase of 29.83%. Net profit was HK$151 million, surging 320.4% compared to the previous year. Shareholders' attributable profit reached HK$228 million, turning a profit from the same period last year and exceeding the forecast range of HK$220 million to HK$265 million.
The company's cryptocurrency investments recorded a paper loss of approximately HK$670 million. However, due to the market recovery this year, there was a reversal of impairment losses of HK$186 million.
Back in 2021, Meitu purchased 31,000 ETH and 940.89 BTC. The company has continued to hold these cryptocurrencies, stating, "The Group did not purchase or sell any cryptocurrency pursuant to the cryptocurrency investment plan."
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Frequently Asked Questions
How do institutions acquire large amounts of Bitcoin?
Institutions typically acquire Bitcoin through direct purchases on exchanges, over-the-counter (OTC) desks, or as part of treasury management strategies. Some, like mining companies, accumulate BTC through their operational activities.
Why do companies like MicroStrategy hold Bitcoin long-term?
Companies such as MicroStrategy view Bitcoin as a superior store of value and a hedge against inflation. Their long-term holding strategy reflects belief in Bitcoin's potential for appreciation over time.
What impact do large institutional sales have on the market?
Significant sales by large holders, like government auctions, can create downward pressure on Bitcoin's price due to the sudden increase in supply. However, the market often absorbs this over time.
How is the average purchase price for institutional holdings calculated?
The average cost is calculated by dividing the total amount spent on acquiring Bitcoin by the total number of coins held. This provides a baseline to measure profitability.
Do all institutions hold their Bitcoin on exchanges?
No, most large institutions use specialized custodial services, cold storage solutions, or other secure methods to hold their Bitcoin, minimizing exchange-related risks.
What are the accounting rules for companies holding Bitcoin?
Accounting treatment varies by jurisdiction. Often, cryptocurrencies are treated as intangible assets on balance sheets, subject to impairment checks, which can create reporting challenges during market downturns.