News from a crypto advisory firm indicates that by 2030, approximately one in every four companies listed on the S&P 500 index will have incorporated Bitcoin into their investment portfolio. The force behind this shift is the pressure on treasury managers to leverage potential Bitcoin profits or risk their employment.
Elliot Chun, a partner at Architect Partners, expressed this sentiment in his March 28 blog post. Chun stated, “By 2030, I predict that one-fourth of the S&P 500 will have Bitcoin in their balance sheets as a long-term asset. The push for this change comes from treasury managers who feel they must at least explore the potential of Bitcoin.”
According to data from BitcoinTreasuries.NET, Strategy (MSTR) currently holds the most Bitcoin among the 89 publicly traded firms with Bitcoin in their portfolios. In light of GameStop’s recent $1.3 billion notes offering, another company is poised to join the Bitcoin investor list.
Presently, Tesla and Block are the only S&P 500 companies with Bitcoin holdings, implying that at least 123 more companies would need to invest in Bitcoin by 2030 to meet Chun’s prediction.
Top tech investors and executives, including ARK Invest CEO Cathie Wood, Galaxy Digital CEO Mike Novogratz, Coinbase CEO Brian Armstrong, and Block CEO Jack Dorsey, believe Bitcoin could potentially skyrocket to between $500,000 and $1,000,000 or even higher by 2030.
Companies adopting Bitcoin strategies have seen positive impacts on their stock prices. For instance, Strategy’s stock has surged over 2,000% since its initial Bitcoin investment in August 2020, significantly outperforming both Bitcoin (781.1%) and the S&P 500 (64.8%).
However, Chun warns of a significant difference between companies using Bitcoin for treasury diversification and risk management and those restructuring their entire business models to become industry leaders in Bitcoin treasury. He advises that firms hoping to replicate Strategy’s performance are setting themselves up for disappointment.
Chun also adds that using Bitcoin as a treasury asset to hedge against US dollar and fiat inflation or for risk management diversification remains a “unproven strategy”. Despite this, Bitcoin offers more flexibility than gold as a treasury asset, considering the challenges associated with storing and moving physical gold bars.
Bitcoin, being a digital commodity, is GAAP-recognized as a tangible asset with a fungible and liquid profile. This month, Bitwise launched the Bitwise Bitcoin Standard Corporations ETF, aimed at tracking companies with at least 1,000 Bitcoin in their corporate treasuries.
