Public companies bought more bitcoin than ETFs did for the third quarter in a row

For the third consecutive quarter, corporate treasuries have outstripped exchange-traded funds (ETFs) in their bitcoin acquisitions, as more companies adopt the strategies pioneered by MicroStrategy within a more favorable regulatory landscape. According to Bitcoin Treasuries, public companies amassed approximately 131,000 bitcoins in the second quarter, marking an 18% increase in their bitcoin holdings. Meanwhile, ETFs saw a modest 8% rise, acquiring about 111,000 BTC during the same timeframe. Nick Marie, head of research at Ecoinometrics, noted the contrasting motivations behind institutional investments in bitcoin. "The institutional investors utilizing ETFs are not driven by the same objectives as the public companies, which aim to accumulate bitcoin to enhance shareholder value," he explained. In April, public companies increased their bitcoin holdings by 4%, a notable performance during a tumultuous period marked by market fluctuations following President Donald Trump's initial tariff announcements. In contrast, ETFs' holdings grew by only 2% during that month. Marie added that these companies are less concerned about bitcoin's market price and more focused on growing their bitcoin reserves to appeal to proxy buyers. "It's not merely about macro trends or market sentiments; their motivations differ, creating a unique mechanism that could drive bitcoin's advancement," he said. Bitcoin ETFs, which collectively launched in the U.S. in January 2024, represent the largest holders of bitcoin, with over 1.4 million coins, accounting for about 6.8% of the total supply cap of 21 million. Public companies, however, hold around 855,000 coins, or about 4% of the supply. This shift reflects the significant regulatory easing that the cryptocurrency sector has experienced under the Trump administration, especially following an executive order in March aimed at establishing a U.S. bitcoin reserve. This move sent a clear message affirming the legitimacy and permanence of bitcoin in the investment landscape. The last quarter in which ETFs led public companies in bitcoin acquisitions was the third quarter of 2024, prior to Trump's re-election. Recent developments include GameStop's strategic decision to start purchasing bitcoin after adding it as a treasury reserve asset in March, alongside KindlyMD's merger with Nakamoto, a bitcoin investment firm founded by crypto entrepreneur David Bailey. Additionally, investor Anthony Pompliano's ProCap has initiated its own bitcoin buying program and is set to go public via a special purpose acquisition company (SPAC). MicroStrategy, recently rebranded as Strategy, continues to dominate the bitcoin treasury landscape, holding approximately 597,000 BTC, followed by bitcoin miner Mara Holdings with nearly 50,000 coins. Ben Werkman, chief investment officer at Swan Bitcoin, stated, "Catching up to Strategy's scale will be challenging. They remain the preferred destination for institutional investors due to their liquidity, while smaller firms may attract retail investors seeking high-risk, high-reward opportunities." Looking ahead, Marie speculated that in a decade, the landscape of companies committed to a bitcoin treasury strategy may significantly change. As more companies enter the arena, the impact of each participant could become diluted. Furthermore, by that time, bitcoin may become so mainstream that institutional investors will no longer face restrictions on direct exposure to it. Werkman pointed out that most investors drawn to bitcoin treasury companies already possess a foundational belief in bitcoin. For these investors, leveraging bitcoin equities presents an opportunity to outperform bitcoin itself. "These companies offer something unique—an ability to accumulate more bitcoin on behalf of their investors due to their access to capital markets and securities issuance," he explained. Additionally, many firms may choose to convert their treasury assets into bitcoin without employing leverage, thereby creating added value for their shares, supported by bitcoin and their operational performance.