BITCOIN: Companies snap up the cryptocurrency

Four tech firms have bought 66% of all Bitcoin mined since August.

Three U.S. companies and one company in China have bought more than 66% of all new BTC mined in the past six months, figures show.

Business analytics software company MicroStrategy, payments company Square and U.S. electric car maker Tesla have bought BTC worth billions of dollars, while Chinese photo-editing app Meitu, a Hong Kong-listed company, bought the asset for $17 million earlier this year.

Microstrategy started buying BTC in August and now has over 90,000 Bitcoin (≈ $5 billion), Tesla has over 39,473 BTC (or $2.1 billion; as priced in its February 8 announcement), Square has 3,318 BTC ($184 million), while Meitu has over 330 BTC ($18 million; as priced in its March 8 announcement).

That's a total of 133,000 BTC, and there's a lot more buying pressure coming in: many companies are in line to buy more assets in the coming months, such as Norwegian holding company Aker, which announced a $60 million Bitcoin investment earlier this year.



The figure represents more than 66% of all BTC mined in the last six months. For the uninitiated, the new Bitcoin is generated as a reward for 'miners' or entities that use massive computing power to process transactions and maintain the network while receiving BTC as a 'bounty'.

More than 6.25 BTC are released in each block. Miners generally sell them on the open market to cover the huge costs involved, and this supply is considered the "new" Bitcoin. Approximately 144 blocks are mined per day (releasing 900 new Bitcoin in the process), which means that more than 27,000 Bitcoin are mined per month.

Such an issuance schedule indicates that more than 200,000 BTC have been mined since MicroStrategy began its buying frenzy in August 2020.

The firm is not done with its purchases either, with CEO Michael Saylor stating in a statement early last month, "We will continue with our strategy of acquiring BTC with excess cash," he said, adding that the company would continue to issue debt or equity securities in capital raising transactions with the sole objective of buying even more assets.

Bitcoin vs Wall Street

Over the past year, the gravity-defying stock market has given most investors a reason to smile, but none are smiling more than bitcoin holders. While the S&P 500 is up 17% from early January 2020 to early January 2021, bitcoin has soared 400% in that same time, breaking US$40,000 per coin and dragging down other digital assets.

In 2020, payments giant Square used US$50 million of its corporate treasury to buy bitcoins, an investment now valued at US$161 million. Hedge fund billionaire Paul Tudor Jones said that up to 2% of his assets were in cryptocurrencies, and private equity giant Northern Trust revealed plans to make it easier for its clients to store bitcoin, ethereum, XRP, litecoin and bitcoin cash. PayPal even allows its 300 million customers to buy bitcoins and spend them at any of the 26 million merchants it supports.

Along the way, some crypto investors have become very wealthy. At least five have recently joined the ranks of billionaires, and possibly a few more.


The biggest winners

For this list, we only include their cryptocurrency investments.

Cameron and Tyler Winklevoss

The estimated net worth of cryptocurrency each: US$1.4 billion.

The co-founders of cryptocurrency exchange Gemini, which now earns around US$300 million a day in digital asset transactions, were among the first recognizable names to buy bitcoins. In April 2013, the entrepreneurs, who initially rose to fame for hiring Mark Zuckerberg to build a precursor to Facebook (and later sued Facebook for stealing their idea), reportedly owned US$11 million in bitcoins, later valued at about US$120 per coin. Assuming they kept most of those coins and their ether tokens, each would have more than US$1.4 billion in digital assets.

Matthew Roszak

The estimated net worth of the cryptocurrency: US$1.2 billion.

In the late 1990s and early 2000s, Roszak worked in venture capital and as an entrepreneur (he also settled insider trading charges in 2006) before buying his first bitcoins in 2012. Today, he is co-founder and president of Bloq, a five-year-old -former blockchain technology startup with clients including Citigroup and Discover.

Bloq advises on everything from processing payments for "stable coins," or cryptocurrencies pegged to the value of a traditional currency, to helping banks store digital assets securely. Roszak has long been a crypto evangelist and recently co-led an initiative to give each member of Congress $50 in digital assets. Forbes estimates his crypto net worth at $1.2 billion, up from about $300 million a year ago.

Tim Draper

The Estimated net worth of the cryptocurrency: US$1.1 billion.

As part of the Silicon Valley-based Draper family investment dynasty, in 1985 he became a founding partner of Draper Fisher Jurvetson, a venture capital firm that has made hundreds of investments in companies ranging from Tesla to the now-defunct blood-testing company Theranos.

In 2014, he says, he bought 29,656 bitcoins that had been seized by U.S. marshals from the closed Silk Road black market for US$18.7 million. "Dollars are the currency of the past," Draper told Forbes in an email. "Bitcoin is the currency of the future. What we are seeing now is the global anthropological transition from dollars to bitcoin. Assuming Draper kept everything he bought in 2014, his cryptocurrency would be worth US$1.1 billion.

Michael Saylor

The estimated net worth of the cryptocurrency: US$600 million.

The CEO of business analytics firm MicroStrategy burst onto the bitcoin scene in 2020, leading MicroStrategy to invest more than US$1.1 billion in the cryptocurrency at an average price of around US$15,964 (those coins are now worth US$2.4 billion). He cited concerns about the devaluation of the U.S. dollar as a result of the Federal Reserve printing trillions of dollars and is now leading an effort to customize his company's software to analyze bitcoin data. MicroStrategy's stock has quadrupled since it announced its first bitcoin purchase on Aug. 11. In October, Saylor disclosed that he had personally spent about US$175 million on 17,732 bitcoins; today, they are worth US$600 million. Add to that his US$1.2 billion stakes in MicroStrategy and we have another new billionaire. "The American dream requires the currency to be sound," says Saylor.

Mike Novogratz

The estimated net worth of the cryptocurrency: $478 million.

After a series of bad investments evaporated much of his wealth, this Goldman Sachs and Fortress Group hedge fund titan has been reborn as a cryptocurrency guru. Novogratz is the founder and CEO of Galaxy Investment Partners, which specializes in investing and developing cryptocurrency-related services. In 2013, he reportedly personally invested US$7 million in bitcoin and then used those assets as seed funding for Galaxy. According to September 2020 disclosures, Forbes estimates that Galaxy's crypto assets are worth around US$621 million, a 300% increase in four months. Since Novogratz owns 77% of the company, his stake is worth US$478 million. This does not include any cryptocurrency he might personally own, which he declined to disclose.

Vitalik Buterin

The estimated net worth of the cryptocurrency: US$360 million.

The inventor of ethereum, the second-largest cryptocurrency network, now valued at US$123 billion, has also taken a big hit lately. He is better known for his academic and social interest in cryptocurrencies than for being an investor. But that doesn't mean he's a martyr for his cause. He currently owns more than 333,000 Ether, worth approximately of US$360 million. A year ago, those same digital coins would have been worth just US$45 million.

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