Inspired by MicroStrategy’s success, firms like Marathon Holdings and Japan’s Metaplanet have begun building Bitcoin reserves. Companies outside the cryptocurrency sector, like biopharmaceutical company Acurx Pharmaceuticals, are getting involved, with Acurx recently approving a $1 million Bitcoin purchase.

The trend represents a growing shift in perspective. Bitcoin used to be regarded as a speculative asset, but is now being seen as a possible hedge against inflation and economic uncertainty. Bernstein analysts predict Bitcoin will eventually replace gold as the world’s preferred “store of value,” making it a routine feature in corporate treasuries.

Institutional adoption is also accelerating. Bitcoin-focused exchange-traded funds (ETFs) have surged in popularity, with the BlackRock iShares Bitcoin Trust ETF amassing over $45 billion in assets in a year of its launch in January 2024. By mid-2024, private companies and ETFs collectively controlled 6.29% of the total Bitcoin supply, while publicly traded companies’ Bitcoin holdings rose nearly 200% year-on-year to $20 billion.

The future Trump administration’s evolving stance on cryptocurrency is further bolstering confidence in Bitcoin. Trump has openly expressed his support for the establishment of a strategic Bitcoin reserve, with a proposed Senate bill indicating that the US Treasury and Federal Reserve might hold up to 5% of the global Bitcoin supply in five years. The reserve would aim to minimise currency risk, reduce national debt, and strengthen the US balance sheet.

Further regulatory changes could amplify Bitcoin’s appeal. Gary Gensler’s decision to step down as SEC chair is expected to pave the way for more crypto-friendly policies. Trump’s team is reportedly considering creating a White House position to overseeing blockchain and cryptocurrency development, indicating a more structured approach to incorporating cryptocurrency into the economy.

While Bitcoin’s surge in value has intrigued businesses, its volatility remains a huge concern. MicroStrategy has demonstrated how using interest-free convertible debt to buy Bitcoin can boost profits. If Bitcoin prices reach $97,400, the company’s holdings could be worth $7.7 billion, according to Benchmark Company managing director Mark Palmer.

However, replicating this strategy presents challenges. Bitcoin’s current price is significantly higher than when MicroStrategy began its purchases, making entry more expensive for new adopters. Companies using debt to buy Bitcoin also risk exposure if prices fall, as their financial obligations remain fixed regardless of market conditions.

Despite the risks, MicroStrategy has weathered past downturns by diversifying its acquisition methods and maintaining flexibility through decisions like share buybacks. Palmer pointed out that the company’s agility gives it a particular advantage.

Not all investors are enthusiastic about corporate Bitcoin adoption. Microsoft shareholders recently voted against a proposal urging the company to buy it, reflecting a preference for stability over volatility.

Gracy Chen, CEO of cryptocurrency exchange Bitget, believes this sentiment is rooted in investor priorities. “For shareholders who build their own diversified portfolios, mixing assets like cryptocurrencies into corporate balance sheets can complicate the valuation of a company and distract from the core business objectives for which investors are buying its shares,” she said.

As Bitcoin gains traction, debates over its role in corporate strategy highlight both its transformative potential and the risks it carries. While MicroStrategy’s approach has inspired a wave of imitators, it remains to be seen whether Bitcoin will become a mainstay of corporations and treasuries or remain a high-stakes gamble.