Bitcoin will be increasingly used as a reserve asset on the balance sheets of publicly listed companies underlining its growing acceptance as an asset class, according to new global research by London-based Nickel Digital Asset Management, Europe’s regulated and award-winning digital assets hedge fund manager founded by alumni of Bankers Trust, Goldman Sachs and JPMorgan.
The study with organizations already invested in the sector “found 75% believe publicly listed companies should hold Bitcoin on their balance sheets with 26% strongly supporting the major digital asset’s use case as a reserve asset.”
Analysis by Nickel shows currently around 42 listed companies “hold over $20 billion worth of Bitcoin.”
This represents a nearly “200% increase in the value of their holdings compared to a year ago when the corresponding figure was $7.2 billion.”
The trend was started by MicroStrategy which “purchased 21,454 BTC in August 2020 and has increased its holdings to 226,500 as of August 2024.”
Collectively, listed companies hold “around 335,000 BTC, equating to 1.6% of the total Bitcoin supply cap, which is pegged at 21 million.”
Nickel’s research with institutional investors and wealth managers in the US, UK, Germany, Switzerland, Singapore, Brazil and the United Arab Emirates who “collectively manage around $1.7 trillion in assets found institutional investors and wealth managers expect strong growth in that number over the next five years.”
Nearly six out of 10 (58%) questioned “believe 10% or more of listed companies will hold Bitcoin on their balance sheets within five years.”
Around one in 12 (8%) forecast 25% or more of listed companies “will have Bitcoin on their balance sheets.”
Anatoly Crachilov, CEO and Founding Partner at Nickel Digital, said that institutional and wealth managers are seeing the value in digital assets as part of their reserve allocation to mitigate currency risk.
As noted in the update, Nickel Digital has “commissioned the market research company Pureprofile to interview 200 institutional investors and wealth managers across the US, UK, Germany, Singapore, Switzerland, Brazil and the UAE in June 2024.”
Nickel Digital Asset Management is “a London-based FCA-authorised and CFTC-registered investment manager that offers a range of digital asset strategy solutions for institutional investors. Its mission is to provide a gateway for traditional investors into the digital assets market across a broad range of risk profiles.”
The firm pursues a range of systematic strategies dedicated “to the digital assets market, with its flagship multi-strategy non-directional fund focusing on alpha generation.”
Nickel is led by a senior team of traders and investment professionals “of experience gained in major Wall Street banks, such as Bankers Trust, Goldman Sachs, JPMorgan, Morgan Stanley, as well as global hedge funds.”
Risk management is the core of Nickel’s approach “to investment management.”
This was evidenced in March 2020, May 2021 when Nickel preserved “the value of investor capital and delivered positive return at the time of market implosion.”