The strategy remains the last bastion of the once-thriving Bitcoin Treasury trading.
Just last week, the company led by perennial Bitcoin bull Michael Saylor bought an additional $39 million in Bitcoin, bringing its stack to a staggering new record of 717,722 Bitcoins worth approximately $45 billion.
Meanwhile, the rest of the Treasury market, which consists of 193 publicly traded companies, has effectively disappeared, according to BitcoinTreasuries.net. While Strategy has increased its stack, three micro-firms have added just over $305,000 in Bitcoin to their balance sheets during the same period, with two of them making purchases of less than $20,000.
This means that Strategy accounts for 99.2% of all current Bitcoin purchases. Even so, its unrealized losses still amounted to $6.5 billion.
Strategy’s unparalleled concentration reveals the industry’s fundamental fragility. Other companies can’t seem to keep up with Strategy, both in terms of access to institutional capital and cash reserves that would allow them to deploy more funds to buy Bitcoin.
Bitcoin Treasuries are companies that buy Bitcoin to hold on their balance sheets. Some people do this simply to diversify their reserves, while others use complex financial schemes and purchase Bitcoin as their only business model.
Investors don’t even need to go back that far to see how severe the crash was.
At the end of January, five treasuries deployed 1,677 Bitcoins in one week. The companies are also diverse in nature, with locations in Korea, Singapore, the UK and the US. Additionally, they come from a variety of industries, including Bitcoin mining and food services.
Even during Bitcoin’s plunge to $60,000 in early February, small-cap Treasury bills continued to buy aggressively, taking advantage of Bitcoin’s cheap price.
Today, this buying behavior has completely disappeared.
Bitcoin miners are typically responsible for between 200 and 400 Bitcoins per week through operational production. Last week, their contribution to the treasury adoption was zero. The Bitdeer company sold virtually all of its capital.
Pedro Solimano is a markets reporter based in Buenos Aires. Any tips? Send him an email atpsolimano@dlnews.com.