Bitcoin: Why the distinction between Grayscale, MicroStrategy’s objectives matters
Most discussions on the subject of Bitcoin’s institutional involvement always hint at the common objective of these institutions. These organizations are clubbed together under one idea, that they believe in the assets, and they want to attain exposure into crypto through Bitcoin.
It is not a false narrative, but over the past few months, most of these organizations might now have a different ideology. It might not just be about growing their capital in an emerging environment.
Understanding Bitcoin treasuries classification
When we think about institutions, Grayscale, and lately, MicroStrategy, come to mind. However, if you track their allocations, Grayscale Bitcoin Trust is 9 times bigger than MSTR, and fundamentally different in its functionality too.
According to recent data, 1,227,615 Bitcoins are held in company treasuries, which is close to 5.85% of the total supply. Now, the difference is that Grayscale Bitcoin Trust mirrors the operations of an ETF, while MicroStrategy is a public company.
MSTR definitely dominates the public company bracket, having accumulated over 70,000 BTC at press time. The difference starts from here.
Grayscale is in the business of promoting Bitcoin from an investment perspective and allowing crypto-exposure for accredited clients.
MicroStrategy is solely holding BTC under its treasury from a business expansion point of view.
Grayscale accumulates BTC so that its services of crypto-exposure do not stop for emerging and potential clients. MSTR is possibly accumulating BTC because it is making them a better company on paper in the eyes of the shareholders.
Take this for example – Since initiating its BTC treasury program, MSTR shares have enjoyed a parabolic rise alongside BTC. Previously, MSTR shared a higher correlation with NASDAQ (51% between 2019 and August 2020). Now, its correlation has dropped down to 21% while it continues to improve its correlation with Bitcoin.
Within a span of few months, MSTR’s stock value has skyrocketed because of its association with Bitcoin. Hence, Bitcoin is bringing a change objective for certain institutions and it isn’t only capital gains.
Will we see more public companies going forward?
Definitely! Microstrategy has introduced the blueprint on how Bitcoin exposure may help the overall market image of a corporation. While major players haven’t accumulated at the level of MSTR yet, it is a certainty that others will follow its path in the future.