At the Bitcoin Amsterdam conference in 2024, Sam Wouters, Head of Marketing at River, presented insights into the growing trend of Bitcoin adoption among businesses, noting a significant 30% increase in just the past year.
Drawing from River’s latest research, Wouters highlighted the reasons behind this shift, how recent changes have fueled interest, and what this trend could mean for the future of digital currency.
Bitcoin’s journey into the business world has evolved significantly. In its early years, few companies took it seriously as a business tool. But in 2014, companies like Microsoft began accepting Bitcoin, briefly spiking business interest.
While momentum slowed, the steady increase in Bitcoin’s value encouraged businesses to start viewing it as a long-term asset. A key turning point arrived in 2020 when MicroStrategy, a major publicly traded company, invested heavily in Bitcoin.
Since then, notable companies like Tesla have followed suit, spurring a trend that has only accelerated with recent changes in U.S. accounting rules, which make it simpler for companies to report Bitcoin on their balance sheets.
Wouters explained that River’s research reflects a rising interest in Bitcoin as a strategic asset. With high inflation, many businesses are finding it necessary to diversify beyond traditional reserves like government bonds. In contrast to cash, which loses purchasing power over time, Bitcoin has the potential to preserve or even increase in value.
Traditionally, companies like Apple kept reserves in low-risk assets, but rising inflation has prompted companies to reconsider where they store their value, making Bitcoin a strong alternative.
Resilience of Bitcoin
Over time, Bitcoin has shown resilience compared to traditional investments, maintaining a steady risk profile relative to assets like the S&P 500, gold, and bonds. Over the last five years, Bitcoin has outperformed the S&P 500, making it a promising option for companies looking to safeguard their financial future.
Businesses from diverse sectors are increasingly integrating Bitcoin into their financial holdings. For instance, Tahini’s, a restaurant chain, sees Bitcoin as a safe long-term savings strategy, while the Real Bedford football club hopes it will provide them with an edge, potentially aiding their advancement in English football leagues.
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Wouters said that Bitcoin’s appeal to businesses has several key drivers. First, it’s become easier to trade Bitcoin in large volumes. In 2020, its market cap was around $90 billion, making it hard for big investors to buy or sell without affecting the price. Now, with a market cap exceeding $1 trillion, Bitcoin offers the liquidity needed for larger trades.
Second, accounting adjustments in the U.S. have simplified Bitcoin reporting for companies, removing many prior complexities. Third, Wall Street’s endorsement of Bitcoin has bolstered its legitimacy, adding a layer of mainstream credibility. Finally, Bitcoin’s persistence over the years has gradually earned it a reputation as a lasting asset, much like the internet once did in its early days.
SMEs pulling on Bitcoin
According to Wouters, smaller businesses are leading the charge in Bitcoin adoption due to their agility in decision-making. Without needing extensive board approvals, they can adopt Bitcoin swiftly and benefit from early advantages. In contrast, large corporations, although interested, often face more bureaucratic hurdles that slow their entry.
Looking ahead, most businesses don’t plan to sell their Bitcoin anytime soon, according to Wouters. Many are even considering further investments. This growing trend suggests that Bitcoin, once viewed as a fringe asset, is becoming a valuable tool for forward-thinking businesses. It has the potential to reshape the future of corporate finance.
