Bitcoin on the Balance Sheet

Investment Note #28 - 13th June 2025

Bitcoin on the Balance Sheet

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“If crypto conferences are increasingly excited about lines going sideways, as opposed to lines going up, then to my mind that’s a bullish signal for where the industry, if not the coins themselves necessarily, are going.” – Odd Lots Newsletter, Bloomberg.

For most of its history, cryptocurrencies were synonymous with wild speculation - people chasing quick returns as prices skyrocketed. Today, however, industry talk is increasingly about stability and utility rather than overnight gains. A prime example has been the rise of stablecoins (which we discussed in Investment Note #20), digital coins pegged to stable assets (like the US dollar), designed not to shoot “to the moon” but to hold steady value.

Could this shift signal a maturing industry that wants to be taken more seriously by mainstream players, or is it simply another phase in crypto’s evolving journey?

Corporate BTC

Nothing illustrates this growing fixation on stability quite like the latest trend: companies adding Bitcoin (BTC) to their balance sheets. Fintech firms to retailers are now holding Bitcoin as part of their corporate treasury reserves. This marks a departure from traditional norms. Typically, companies park excess cash in safe, liquid assets (like bank deposits or government bonds), not in highly volatile cryptocurrencies.

Yet in Q2 2025, 79 publicly traded companies disclosed Bitcoin holdings (source: CoinReporter). Collectively, these firms now hold approximately 688,000 BTC, about 3.3% of Bitcoin’s total fixed supply, valued at roughly $75 billion at recent prices (source: Nasdaq). And this figure is growing, with 95,000 BTC acquired in Q1 2025 alone. Does this accumulation signal a shift in perceptions of Bitcoin as a strategic asset rather than a speculative gamble?

This trend extends beyond tech giants such as Tesla and crypto-centric firms like Strategy (formerly MicroStrategy), whose Bitcoin investments have previously dominated news cycles. Increasingly, smaller, lesser-known companies are following suit, suggesting a broader shift is underway across industries.

New Safe Haven?

But what has led CFOs and company boards to include a highly volatile asset like Bitcoin on its books? The idea wasn’t entirely irrational at a time when central banks were aggressively printing money and interest rates were zero. Holding large amounts of cash no longer felt like a reliable store of value. In that context, allocating a small portion to Bitcoin looked like a reasonable alternative.

There are several reasons a company might choose to hold Bitcoin but not all of them are sound. Some see it as a bet on future value. Others use it as part of complex financial strategies. A few might even treat it as a kind of insurance policy against the long-term decline of traditional currencies such as the US dollar.

Even without doomsday views on fiat currency, some companies see merit in diversifying a portion of their treasury holdings into digital assets. Traditionally, firms might buy foreign currencies or commodities as part of a diversification strategy. Corporate treasurers, especially in tech-forward names, might reason that a measured Bitcoin investment is akin to a venture-style allocation of treasury funds: high risk, high reward, but limited to a portion of capital, and increasingly viewed not just as speculation, but as a legitimate “reserve asset”.

Beyond the Balance Sheet

Until recently, the impacts of crypto largely remained within the crypto world. If you bought a cryptocurrency token - and there are thousands, tied to everything from internet memes to political figures - and things went south, the consequences were yours alone. If the platform holding your assets collapsed or was hacked, that was just part of the risk. But now, the crypto ecosystem is beginning to creep into broader financial markets.

History offers a cautionary tale. During the dot-com boom, countless firms rushed to adopt internet strategies, regardless of their actual relevance to the core business, to boost their stock prices. Many rebranded or launched questionable online ventures to ride investor enthusiasm, only to quietly abandon them after the crash.

Some companies now go out of their way to highlight their Bitcoin exposure. When Block, Inc. (formerly Square) added Bitcoin to its treasury, it was prominently featured in shareholder letters and earnings calls. Others, such as Nexon, a Japan-based video game publisher, and Meitu, a Chinese photo-editing app company, actively promoted their digital currency moves through press releases, presenting them as strategic shifts. But after taking losses, both firms quietly stepped back, making no further purchases and largely dropping crypto from their public communications.

For most shareholders, the basics still matter: steady profits, clear financial discipline, and a sustainable business model. Bitcoin makes that harder. Its price swings wildly, and some accounting rules can mean companies may have to record losses when the value drops but can't book gains when it rises. That, along with unclear regulatory treatment, makes Bitcoin a difficult and risky asset to manage on a corporate balance sheet.

Summary

It’s hard to argue against the fact that digital currency assets appear to be maturing. They have made their way into boardrooms, treasury strategies, and earnings calls.

When panels of institutional investors at crypto conferences are more focused on compliant reporting, audited reserves, and CFOs who can justify their digital asset holdings in plain English, it marks a significant shift in tone. Bitcoin on the balance sheet might be one further step in this transition, or it might be another cycle of hype dressed up in financial language.