Companies Are Bingeing on Bitcoin. It Isn't Just MicroStrategy. — Barrons.com

By Paul R. La MonicaAs Bitcoin prices continue to hit new highs, more companies are following the strategy of Michael Saylor's MicroStrategy, buying the world's most valuable cryptocurrency and holding it on their balance sheets.According to data from Bitwise, a crypto asset management firm, companies held 847,000 Bitcoin as of the end of the second quarter, up 23% from the first quarter. That is more than double the amount at the same time in 2024.MicroStrategy owns more than 70% of that total. It seems unlikely that other companies will try to amass as much Bitcoin as Saylor has.It is one thing to own Bitcoin as a way to try to increase shareholder returns. Changing your company's business model and going all-in on crypto is another.Still, Bitwise also noted that of the 125 companies that now own Bitcoin, 46 of them bought it for the first time in the second quarter, including GameStop.There are no signs of a slowdown as the second half of the year begins.Figma, the design-software firm that recently filed plans to go public, has disclosed in its regulatory paperwork that it owns some Bitcoin, a Bitcoin exchange-traded fund, and USDC, the stablecoin issued by newly public Circle Internet Group. Figma said it intends to make more crypto investments.And just this week, a small French semiconductor firm named Sequans Communications announced it had purchased 370 Bitcoin. The stock has surged more than 65% on the news.CEO Georges Karam said in a press release that "this initiative reflects our confidence in bitcoin as a long-term store of value for our shareholders." He said the goal was to accumulate more than 3,000 Bitcoin.At current prices, a stake of that size would be worth nearly $335 million. The company recently raised $384 million in equity and debt financing from outside investors to help fund the Bitcoin purchases.Ben Werkman, chief investment officer with Swan Bitcoin, a crypto trading firm that is working with Sequans on its Bitcoin purchase strategy, told Barron's that even though cryptocurrencies remain volatile, more companies seem inclined to invest in Bitcoin thanks to the Trump administration's full-throated endorsement of Bitcoin, stablecoins, and other tokens."You're seeing more companies and executives taking the next step in crypto. Bitcoin now has reached an escape point from regulatory risks," Werkman said.The president's own publicly traded company, Trump Media & Technology Group, is also planning to raise about $2.5 billion to start its own Bitcoin treasury.All that buying should push Bitcoin prices even higher, which in turn could lead to even more companies looking to start Bitcoin treasury plans.Gerry O'Shea, head of global market insights at Hashdex, a crypto asset management firm, said in an email to Barron's that he expects Bitcoin prices to soon hit $140,000, up more than 25% from current levels, thanks in part to "corporate adoption and an increasingly favorable regulatory climate."Of course, the breakneck swings in crypto prices may keep the bluest of blue chips on the sidelines. Don't expect a company like Coca-Cola or Warren Buffett's Berkshire Hathaway to start buying Bitcoin soon, if ever.But for many other tech and financial services companies that already have skin in the crypto game, a Bitcoin treasury plan may appear more appealing than just sticking cash in stodgy government bonds. Companies may be able to earn more on their cash over the long haul by investing in Bitcoin, assuming it continues to rise at its recent meteoric rate.But at the same time, corporations will be putting the value of their corporate treasuries at risk in the short term, so Bitcoin's notorious price swings may give many other CFOs and investors pause. Bonds are still much safer.Write to Paul R. La Monica at [email protected] content was created by Barron's, which is operated by Dow Jones & Co. Barron's is published independently from Dow Jones Newswires and The Wall Street Journal.