As the inauguration of U.S. President-elect Donald Trump’s administration approaches, American companies are increasingly investing in Bitcoin. According to the New York Times on the 8th (local time), more than 70 listed companies have begun investing in Bitcoin since President Trump declared last year that he would become the “cryptocurrency president.”
This represents a drastic shift in traditional corporate finance departments from safeguarding cash to seeking higher returns. MicroStrategy, a software company holding the most Bitcoin globally, started purchasing Bitcoin in 2020 and currently holds over $40 billion in Bitcoin assets. The company’s stock price has increased by about 2000% over the past four years.
Following this trend, more companies are following suit. Rumble, a conservative social media company, announced in November last year that it would invest $20 million in Bitcoin, resulting in its stock rising about 70% after the announcement.
Simon Zerovich, the CEO of Japanese investment firm Metaplanet, also declared he would increase Metaplanet’s Bitcoin holdings to 10,000 this year.
Joe Davie, CEO of marketing technology company Banzai, announced in November that the company would invest up to 10% of its $4.3 million cash assets in Bitcoin, explaining that Bitcoin investments could protect the company if the U.S. dollar’s value falls due to inflation.
California medical device manufacturer Semler Scientific has decided to invest most of its assets in Bitcoin. The company previously used corporate funds for other business acquisitions or share buybacks and now aims to pursue higher returns through Bitcoin.
With the rapid rise in Bitcoin prices, even companies unrelated to cryptocurrency are joining in Bitcoin investments. What was once regarded as a temporary trend has now gained mainstream legitimacy, according to the New York Times.
However, this movement contrasts with the cautious approach typical of traditional corporate finance departments, whose role was to protect cash. Now, they are shifting to take on risks for higher returns.
Concerns are also being raised about companies purchasing Bitcoin. Banzai’s CEO, Joe Davie, reported that, following the announcement of Bitcoin investment plans, he received calls from shareholders asking, “What’s happening?”
Naresh Aggarwal, deputy director of the U.S. Corporate Finance Officers Association, stated, “I don’t understand why risk-averse boards are investing in digital assets. Cryptocurrency is highly volatile, making such investments unjustifiable.”
Lee Reiner, a professor at Duke University School of Law, commented, “Even if one does not invest in Bitcoin, more people will be exposed to Bitcoin’s volatility.”