The corporate Bitcoin market, which has moved over $100 billion in acquisitions by public companies since 2020, is losing strength in 2024. Recent data shows that, for the first time in four years, only one company continues to expand its BTC reserves significantly:StrategyMeanwhile, other giants who had joined the trend — such as Tesla, Block and Marathon Digital — drastically reduced their purchases or even sold part of their assets.
The Decline of Corporate Bitcoin: Why Are Companies Retreating?
Since MicroStrategy announced its first Bitcoin acquisition in August 2020, the market has witnessed an unprecedented move: dozens of listed companies have started to include the asset in their balance sheets as a value reserve. That year, the strategy seemed promising: the price of Bitcoin rose from about $11,000 to almost $70,000 in November 2021. However, the scenario has changed. In 2022, the collapse of the Earth (LUNA) and the collapse of FTX shook confidence in the industry. In 2023, rising U.S. interest rates made investment in risk assets less attractive, and 2024 already shows signs of exhaustion.
According to reports ofCryptoSlateNet Bitcoin Purchases by Public Companies90% by 2024While Strategy added more than $2 billion in BTC in the first half of this year alone, other companies such as Block (formerly Square) reduced their reserves by 15%, and Tesla, which sold 75% of its holdings in 2021, has not made any new acquisitions since then.
What explains the persistence of the strategy?
Strategy, led by CEO Michael Saylor, continues to see Bitcoin as a reserve of value above the dollar or U.S. Treasury bonds. In June 2024, the company announced the purchase of another 12,000 BTC, raising its stake to about 214,400 bitcoins, valued at more than $13 billion. The company’s strategy is based on three pillars:hedge against inflation, asset diversification and Bitcoin’s long-term belief.
However, experts question whether this approach is sustainable for other companies. "Companies that have bought Bitcoin in recent years have done so at a time of low interest rates and expectations of continuously high. Today, with U.S. interest rates above 5% per year, the opportunity cost of finding a volatile asset like Bitcoin is very high," explainsby Fernando UlrichIn addition, shareholder pressure for immediate returns and the lack of clear regulation in many countries also discourage new memberships.
Impact on the market: what changes for Brazilian investors?
For Brazilian investors, the reduction in corporate Bitcoin purchases has two main effects.The first is the lower institutional demand, which canPressure the price of the asset in the short termBy June 2024, Bitcoin had ranged between $60,000 and $70,000, but analysts likeCryptoSlateThey warn that without a new influx of institutional capital, the upward trend may weaken.
The second effect is theRetail Investor (Individual Investor) and Investment Fundin the price of Bitcoin. In recent months, platforms such as theCoinbaseThe BrazilianCointelegraph BrazilThey will have a 25% increase in BTC purchases by individuals in Brazil, especially after the regulation of the crypto asset market by Federal Revenue in 2024.Better Home & FinanceTo allow borrowers in the US to use Bitcoin or USDC as a guarantee for the initial payment of mortgages, a novelty that may, in the future, arrive in Brazil.
Another point of attention is theIncreased regulationIn May 2024, the Central Bank of Brazil (BCB) issued new guidelines for the crypto asset market, requiring exchanges and service providers to register and comply with anti-money laundering standards. While the regulation brings more security to investors, it can also increase operating costs, which discourages some companies from entering the market.
Conclusion: Corporate Bitcoin remains alive, but at a slow pace
Despite the company’s downturn, corporate Bitcoin is not dead — it is just adapting. Strategy continues to bet on the asset, and other companies can resume purchases if the macroeconomic scenario improves, with lower interest rates and greater regulatory clarity.Caution and Opportunity.
If on the one hand the institutional demand has decreased, on the other hand, the Brazilian market shows signs of maturity, with more individuals and investment funds entering the sector.Initial Crypto Payments for Mortgages– already tested in the U.S. – can open up new fronts for the use of Bitcoin on a daily basis.
For those looking to understand the future of Bitcoin, the lesson is clear:The market is in transitionCompanies that wagered early can reap the fruits, but new participants need to evaluate risks and opportunities carefully. After all, as the saying goes, “Don’t put all your eggs in the same basket” — and in the world of cryptocurrencies, this has never been so true.