Corporate Treasuries Will Add $330 Billion in Bitcoin by 2029: Bernstein

In brief

Bernstein analysts are predicting that companies will buy $330 billion in Bitcoin over the next five years.
A lot of the acquisitions will come from Strategy—formerly MicroStrategy—buying the asset.
But smaller firms will continue to emulate its BTC balance sheet plan.

Corporate money is going to keep flowing into Bitcoin as big companies buy up the cryptocurrency, analysts at Bernstein said in a note Monday, predicting $330 billion in inflows over the next five years.

The investment firm’s analysts predicted that Strategy will account for most of the purchases with smaller firms trying to copy the software developer-turned-Bitcoin-treasury business model.

Nasdaq-listed Strategy (MSTR) started buying Bitcoin in 2020 as a way to generate returns for its shareholders during the COVID-19 pandemic. Strategy now holds 555,450 BTC, worth $52.2 billion at today’s prices.

“Small companies with low growth-high cash have better market fit with the MSTR Bitcoin playbook—there is no visible road ahead for them for value creation, and the success of the MSTR model offers them a rare growth path,” the analysts wrote.

But they added that not every “Bitcoin treasury will be successful simply replicating MSTR’s playbook.”

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Bitcoin was recently trading at about $94,000, down more than a percentage point over the past 24 hours. But it is up nearly 50% over the past year, and has drawn the attention of a range of companies.

A number of smaller firms have already started to try to emulate Strategy’s model, including medical technology developer Semler Scientific and Japan-based Metaplanet, a Japan-based provider of hotel management services. Both firms are now focusing on acquiring Bitcoin.

On Monday, Strategy said that it had purchased 1,895 bitcoin worth about $180 million based on current pricing. Semler announced its own acquisition of 167 bitcoin worth roughly $16.2 million.

Bitcoin advocates argue that the cryptocurrency is an inflation hedge and a better option than holding cash.

Financial analysts have argued that Strategy’s model is risky as the firm’s performance depends on the price of Bitcoin, which remains a volatile asset.

MSTR has soared since the company’s first Bitcoin buy in August 2020. The stock was then priced at under $15; it was recently trading for nearly $378—an increase of over 2,476%.

Edited by James Rubin