Bitcoin adoption will rise: 50% of biggest companies will hold BTC by end of 2021.
Data from the exchange Kraken indicates an increase in companies adopting Bitcoin as a reserve asset. Assets under management by Grayscale exceed $15.5 billion with the majority allocated to BTC Trust.
Crypto exchange Kraken has made a prediction about the level of adoption that Bitcoin will reach in the coming year. Furthermore in a paper presented by Bitcoin’s Kraken strategist, Pierre Rochard, the adoption level of Bitcoin will explode due to its increase as a store of value. Rochard said:
My boldest prediction is that if we take the S&P 500, the world’s largest corporations, I think that by the end of 2021, more than half of them will have Bitcoin on their balance sheet, and I think that will be driven by simple economics, which is that issuing shares to buy Bitcoin causes your stock price to go up more than the dilution.
Rochard’s predictions supports changes in the reserve strategy that companies like MicroStrategy and Square have made. By allocating a percentage of their cash flow to Bitcoin, these companies initiated a domino effect. In that sense, Rochard adds:
And so because that is the case – we have market data showing this – we’re going to see a huge amount of corporate adoption of Bitcoin, and we’ll even see like what [MicroStrategy CEO] Michael Saylor is doing, corporations issuing large quantities of bonds, fixed-income instruments – whether they’re convertible or whatever – in order to just bulk buy Bitcoin.
Banking instituitions rejects MicroStrategy’s debt issuance to acquire more Bitcoin. The company’s shares receiving a penalty in score moved them from a “neutral” recommendation to “sell” recommendation reported by CitiBank.
However, the high demand allowed the Saylor-led company to increase its offer from $400 million in debt to $600 million. Indicating that the market is hungry for similar offerings. Moreover Rochard believes that eventually, this will lead to total dominance of Bitcoin as a medium to settle any transaction.