BitGo Blog: Discusses Bitcoin’s First Movers and Growing Mainstream Acceptance as More Institutional Investors Embrace Cryptocurrencies

BitGo, the leading digital asset financial services company, issued a blog post discussing 30 private and public companies that are the first movers to add Bitcoin to their balance sheet or portfolios.

Bitcoin has attained newfound ubiquity over the past year, with prominent figures ranging from Bridgewater’s Ray Dallio to Tesla’s Elon Musk acknowledging the viability and utility of the asset class. Often referred to as ‘digital gold,’ Bitcoin is supported by a resilient, peer-to-peer global ledger called a blockchain. Like gold before it, Bitcoin is perceived to be a hedge against rising inflation of the dollar and other global fiat currencies. Bitcoin’s popularity and adoption as a reserve asset has further increased over the past year due to the fallout from the Covid-19 pandemic and subsequent monetary expansion.

Over the past year, in the face of inflation and global uncertainty, mainstream businesses have forayed into digital assets with newfound enthusiasm. From public companies like Tesla and Square to funds like Grayscale Bitcoin Trust and Tudor Investment Group, prominent institutions are increasing their exposure to Bitcoin. In aggregate, these institutions are estimated to hold over 6% of the 18.6 million Bitcoin in circulation, amounting for over 1.2 million BTC. At time of writing, with Bitcoin surpassing an all-time high of over $48,000, the total value of these institutional holdings has eclipsed $55 billion.

In the list below are many of the well-known entities who have entered the world of cryptocurrency, either by adopting Bitcoin reserves internally, becoming active managers of sizable crypto portfolios, or otherwise having substantial exposure to digital assets.

Businesses Holding Bitcoin Reserves

1. Tesla - Run by the world’s richest person Elon Musk, the publicly traded automotive and clean energy company Tesla announced it had allocated $1.5 billion worth of Bitcoin to its treasury reserve, making up 8% of the company’s $19.4 billion in cash and liquid assets. Musk also intends to accept Bitcoin as payment for its products in the near future. Musk’s latest announcement was not his first foray into cryptocurrencies; the outspoken CEO had recently caused a surge in volume and price appreciation in both Dogecoin and Bitcoin with a series of cryptic Tweets.
   
2. MicroStrategy - Bitcoin’s institutional legitimacy was set in motion when the world’s largest publicly traded business intelligence company, MicroStrategy, announced a balance sheet allocation to Bitcoin worth an initial $250 million in August 2020. By the end of 2020, the company had amassed an aggregate of over 70,000 BTC after subsequent investments of $175 million in September, and another $50 million in December. MicroStrategy’s CEO Michael Saylor has become one of Bitcoin’s most visible proponents, and he recently hosted a well-attended “Bitcoin for Corporates” summit in which he spoke to over 2,000 guests from a variety of corporations on the advantages of emulating MicroStrategy’s capital allocation.
   
   Consequently, several of MicroStrategy’s largest shareholders have also attained indirect exposure to Bitcoin, including the sovereign wealth fund Norwegian Government Pension Fund (1.5%), American asset managers BlackRock (15.2%), The Vanguard Group (11.7%), as well as Renaissance Technologies (2%), owner of the Medallion funds considering Bitcoin futures. BlackRock is also reportedly adding Bitcoin as eligible investment to two of its funds: BlackRock Strategic Income Opportunities and BlackRock Global Allocation Fund Inc.
   
3. Galaxy Digital Holdings - Former Goldman Sachs veteran and renowned Bitcoin bull Michael Novogratz’s Toronto Stock Exchange-listed asset management firm has a material holding in Bitcoin of $176.4 million as of September 2020, according to financial results revealed by the firm. In addition, Galaxy Digital acquired 2 cryptocurrency firms (Drawbridge Lending and Blue Fire Capital) to make way for bigger institutional demand for Bitcoin in November 2020. Galaxy also launched a new business unit this January dedicated to offering a suite of financial services and products for Bitcoin miners. Novogratz, an early adopter of Bitcoin amongst institutional investors, is a frequent guest and commentator on various financial media outlets where he gives his commentary on the asset and current developments in the crypto space.
   
4. MassMutual – In December 2020, 169-year old American insurance and financial services giant MassMutual unveiled that it had invested $100 million into Bitcoin through the New York Digital Investment Group (NYDIG), along with a $5 million equity investment. Renowned for being a prudent investor, MassMutual’s entry into Bitcoin marks a new milestone for the digital asset, which may serve as a bellwether to other insurance companies and pension funds to follow it into the space. While it is unsurprising to see companies at the leading edge of technology like Tesla or PayPal embrace Bitcoin, seeing a centuries-old insurance monolith enter the space so emphatically may mark a true sea change.
   
5. Marathon Patent Group - The Nasdaq-listed cryptocurrency mining company swapped $150 million of its cash treasury for 4,813 Bitcoin at the end of January 2021 through the New York Digital Investment Group (NYDIG). Formerly known as American Strategic Minerals Corporation, Marathon has enjoyed renewed relevance and a resurgent share price since the company shifted its business strategy to Bitcoin mining over the past year.
   
6. Voyager Digital - A financial statement ending on the 31st of March 2020 revealed crypto asset broker Voyager Digital’s digital asset holdings at $7 million worth of Bitcoin held at exchanges or by custodians. This Bitcoin accumulation closely follows the broker’s growing cryptocurrency trading on its mobile app in January 2020. Recently, the company announced that it seeks to raise $25 million from a private placement with agent Stifel GMP for business expansion, granting investors in the opportunity exposure to the company’s cryptocurrency holdings.
   
7. Square Inc. – Square and Twitter CEO Jack Dorsey moved approximately 1% of the total assets of digital payment firm Square Inc. into Bitcoin, announcing an investment of $50 million for 4,709 BTC in October 2020 via a press release. Explaining the move, Square suggested that “cryptocurrency is an instrument of economic empowerment.” This isn’t the first of Square’s involvement with digital assets: Square’s Cash app has allowed users to buy and sell Bitcoin within its app since 2018. The firm has also established a consortium, the Cryptocurrency Open Patent Alliance (COPA), aimed at building up a collaborative library of patents for the advancement of crypto technologies.
   
8. Hut 8 Mining - Toronto-listed Hut 8 Mining offers qualified investors direct exposure to Bitcoin through its mining operation and via its Bitcoin balance, investing over $36 million for 2,851 BTC in its treasury to date. Additionally, the mining company opened a Bitcoin Yield Account with Genesis Global Capital in January 2021 through an initial investment of 1,000 Bitcoin, entitling Hut 8 to a 4% interest on its BTC holdings. A recent announcement further unveiled the miner completed $11.8 million of financing for 5,400 new Bitcoin mining machines.
   
9. Snappa - Joining the ranks of major companies with disclosed Bitcoin holdings is Canadian graphics software firm Snappa. In a blog post, CEO Christopher Gimmer declared a robust 40% allocation of its cash reserves in Bitcoin, noting that Snappa seeks to continue amassing the digital coin.
   
10. Fidelity Digital Assets - Despite involvement in Bitcoin mining as early as 2014, the $2.3 trillion London-based investment firm Fidelity’s mining efforts is nowhere near as noteworthy as its 10.5% ownership stake in the publicly traded Bitcoin mining company Hut 8, with the firm disclosing it had purchased over 4.1 million mining units in a June 2020 overnight market offering. Fidelity is also now accepting Bitcoin as collateral for cash loans, offered by third-party lenders such as BlockFi and CME Bitcoin Futures.
    
11. Mode Global Holdings PLC - United Kingdom-listed Bitcoin banking app Mode Global Holdings PLC converted up to 10% of its cash reserves into Bitcoin as part of a long-term treasury reserve strategy in October 2020 to protect its investors’ assets against the diminishing value of fiat currency.
    
12. Riot Blockchain - During Bitcoin’s historic 2017 price run, the California Public Employees’ Retirement System, which manages over $450 billion in assets, initially purchased 16,907 of the Nasdaq-listed Bitcoin mining company’s shares, with a subsequent investment totalling to 113,034 shares valued at nearly $2 million. According to a quarterly report ending September 30 2020, Riot Blockchain has allocated 1,175 BTC on its balance sheet. Like Marathon and Hut 8, Riot has substantial Bitcoin mining operations. The Colorado-based company has a market cap of over $2.5 billion.
    
13. Hive Blockchain Technologies LTD. - Listed on the TSX Venture Exchange in Canada, Hive utilizes geothermal and hydroelectric energy to power its industrial-scale cryptocurrency mining facilities in Canada, Sweden, and Iceland. As of a September 2020 investor presentation, Hive had $3.5 million in digital assets on its balance sheet, mostly in Bitcoin and Ethereum.
    
14. Argo Blockchain Plc - London-listed Argo Blockchain went public in 2018 and is yet another company engaged in mining Bitcoin and other digital assets. In a recent operational update, Argo reported that it had mined 2,465 Bitcoins over the course of 2020. CEO Peter Wall is bullish on Bitcoin’s continued long-term adoption, stating that “The Bitcoin market has entered 2021 on a roll, and we are very optimistic this year will continue to see an increasing mainstream adoption of cryptocurrency. We look to the future with much optimism.”

Funds Managing Bitcoin Assets

1. Grayscale Bitcoin Trust (GBTC) - Leading financial vehicle Grayscale Bitcoin Trust, which allows investors to trade shares in trusts holding substantial amounts of Bitcoin, manages the largest portfolio of Bitcoin assets worth over 600,000 BTC. While it largely mirrors Bitcoin’s performance, investor sentiment often plays a large role in the final GBTC stock price and the shares can trade at a discount or premium to the net asset value of the BTC that the trust holds.
   
2. Miller Value Partners LLC – Renowned investor Bill Miller’s investment firm Miller Value Partners LLC operates a $154 million hedge fund called MVP 1, which allocated 30% of this fund to Bitcoin in 2017. In 2018, Miller mentioned having half of his fund in Bitcoin before moving 90% of his Bitcoin holdings into a separate fund. As of February 2021, it was reported that Miller’s fund now owns Bitcoin in a partnership called Patient Capital with his partner Samantha McLemore.
   
3. Tudor Investment Group - Billionaire investor and hedge fund manager Paul Tudor Jones announced in May 2020 that 1-2% of his total assets worth $5.3 billion have been invested into Bitcoin. In a December 2020 interview, Jones, once a critic of digital assets, expressed his newfound optimism regarding the virtual coin, citing purchasing power, trustworthiness, liquidity, and portability as grounds for Bitcoin being a sustainable store of value. As one of the most well-known and visible hedge fund veterans on Wall Street, Jones’ public endorsement of Bitcoin as a viable portfolio component bestowed a new level of acceptance and respect for BTC amongst more traditional hedge funds and institutional investors.
   
4. CoinShares - Founded in 2015, cryptocurrency fund manager CoinShares owns 69,730 BTC across 2 exchange-traded funds: Bitcoin Tracker One and Bitcoin Tracker Euro. In 2021, CoinShares listed a Bitcoin-backed Exchange Traded Product (ETP) called CoinShares Physical Bitcoin on SIX, Switzerland’s main stock exchange.
   
5. Bitwise 10 Crypto Index Fund - The open-ended publicly traded statutory trust launched by Bitwise Asset Management tracks 10 of the biggest cryptocurrencies, with Bitcoin making up 75% of the fund in November 2020 according to its website. The Fund has also announced that it is seeking regulatory verification to publicly trade its shares in an effort to compete with other investment vehicles like Grayscale.
   
6. Pantera Capital - Pantera Capital’s Pantera Bitcoin Fund was the first United States-based Bitcoin fund ever launched. It services business entities as well as high-net-worth individuals with large sums of Bitcoin, with over 70 investments made since 2013. While there has not been a public disclosure of the amount of Bitcoin Pantera holds, a January 2021 article by the investment firm itself declared that its Bitcoin fund gained +299% in returns. Pantera’s CEO and co-CIO Dan Morehead, a Goldman Sachs and Tiger Management veteran, is a leading voice on Bitcoin and other digital assets, having notably established a $100,000 BTC price target for August 2021.
   
7. Ruffer Investment Company - London Stock Exchange-listed Ruffer Investment Company converted 2.7% of its $27 billion portfolio to 45,000 BTC in November 2020, citing the investment as a “protective move” and a hedge against “a fragile monetary system and distorted financial markets”.
   
8. Guggenheim Partners - Though financial services company Guggenheim Partners does not directly own Bitcoin, the company has reserved the right to set aside over $500 million or 10% of its $5.3 billion Macro Opportunities Fund for investment in GBTC. Guggenheim’s well-known CIO Scott Minerd forecast that Bitcoin will eventually top $400,000 on numerous occasions.
   
9. 3iQ The Bitcoin Fund - Canadian investment fund 3iQ’s public Bitcoin fund recently completed private placements to be listed on the Toronto Stock Exchange. As of January 2021, the fund is now worth over $785 million in assets under management, effectively doubling its Bitcoin holding value from $392.5 million in November 2020.
   
10. ETC Group Bitcoin ETP - London-based financial services firm ETC Group’s Bitcoin exchange traded product (ETP), with primary stock symbol BTCE, was recently listed on the SIX, Switzerland’s primary stock exchange, in January 2021. ETC Group now holds 13,445.998 BTC in assets under management, according to the firm’s website. Unlike Grayscale’s Bitcoin Trust, ETC enables both issuance and redemption of assets, much like an ETF.
    
11. SkyBridge Capital - After filing SEC documents to open its first Bitcoin fund called SkyBridge Bitcoin Fund LP in December 2020, follow-on reporting confirmed the investment firm has acquired an additional $182 million in Bitcoin prior to official the launch of the hedge fund on January 4th, 2021.
    
12. One River Asset Management - One River Asset Management purchased $600 million in Bitcoin and Ethereum in December 2020 for its Bitcoin Fund and Ethereum Fund. The firm also plans to boost its cryptocurrency holdings to $1 billion in 2021.

Educational Investments

1. Harvard University - As the largest university endowment - which are capital pools accumulated to support teaching, research, and other investments - of over $40 billion in assets, the Ivy League school’s influential management firm, Harvard Management Company, invested $11.5 million into cryptocurrency-related company Blockstack in 2019. This may not have been the first time the university had been associated with cryptocurrency, as multiple sources have reported that a portion of the university’s assets have been allocated in crypto via exchanges.
   
2. Yale University - Yale’s Chief Investment Officer David Swensen broke headlines in 2018 for backing 2 crypto venture funds: a $300 million fund by Andreessen Horowitz, and Paradigm by Coinbase co-founder Fred Ehrsam and ex-Sequoia Capital partner Matt Huang. Subsequently, several other institutions jumped on board, including Harvard University, Stanford, Dartmouth College, MIT, the University of North Carolina, and the University of Michigan. Several sources have maintained that the university has had a portion of its $30 billion endowment invested in Bitcoin.
   
3. University of Michigan - In 2018, the University of Michigan’s $12.5 billion endowment fund committed $3 million to Andreessen Horowitz’s cryptocurrency fund a16z Crypto before later expressing its intention to allocate even more money into the fund. While no exact amount has been revealed, the university’s endowment fund has also been reported to be holding cryptocurrency via exchanges.
4. Brown University - While Brown University kept mum when pressed for comments, Brown University’s $4.7 billion endowment fund is rumored to be purchasing cryptocurrency such as Bitcoin directly through exchanges.

Bitcoin’s mainstream acceptance stands to grow exponentially as more institutional investors embrace cryptocurrencies, clearing the way for future entrants to follow their path. This escalating market demand from large entities will likely continue impacting Bitcoin’s value, and may even serve to mitigate its volatility. With the final Bitcoin expected to be mined in 2140 and over $2 trillion of monthly trade volume, there’s still plenty of time to enter Bitcoin - for businesses and individuals alike. While the adoption of Bitcoin amongst institutional investors, corporations, and endowment funds has already accelerated rapidly, we are likely only at the tip of the iceberg in terms of mass adoption as additional corporations and funds see the success that these first movers have enjoyed and thus begin to follow their lead.

If you’re interested in joining these first movers and making Bitcoin a part of your portfolio, contact BitGo to learn more.

Disclaimer: Data cited above current as of publication date. BitGo is not affiliated with any of the entities listed above, and the information provided is not a testimonial in support of any entity or recommendation for any services. No legal, tax, investment, or other advice is provided by any BitGo entity.

About BitGo

BitGo is the leader in digital asset financial services, providing institutional investors with liquidity, custody, and security solutions. In 2020, BitGo launched Prime Trading and Lending, as well as BitGo Portfolio and Tax, providing clients with a full-stack solution for digital assets. In 2018, it launched BitGo Trust Company, the first qualified custodian purpose-built for storing digital assets. BitGo processes over 20% of all global Bitcoin transactions, and supports over 400 coins and tokens. BitGo’s customer base includes the world's largest cryptocurrency exchanges and institutional investors and spans more than 50 countries. BitGo is backed by Goldman Sachs, Craft Ventures, Digital Currency Group, DRW, Galaxy Digital Ventures, Redpoint Ventures, and Valor Equity Partners.

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