Bitcoin Surges to $100,000: Who's Behind the Scenes?
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In recent years, Bitcoin has increasingly become a significant asset on corporate balance sheets, sparking widespread debate regarding its potential benefits versus potential risksThe surge in Bitcoin's value has prompted a flurry of interest from companies around the globe, transforming it from a niche digital currency to a mainstream asset in the financial arena.
On December 5, Bitcoin exceeded a remarkable milestone, reaching a value of over $100,000. CoinGlass reported that over 198,000 traders experienced liquidations within a 24-hour period due to this volatility, resulting in a staggering total loss of approximately $580 millionThe unprecedented rise in Bitcoin's value, which has skyrocketed more than 140% this year alone, creates an exhilarating yet turbulent atmosphere in the cryptocurrency marketsSince November 4, Bitcoin has surged from $68,000 to its latest high of $100,000.
Launched in January 2009, Bitcoin's journey has led it to achieve a significant position in not only capital markets but also in international financial dynamicsThe first Bitcoin, mined by pseudonymous creator Satoshi Nakamoto on a small server in Helsinki, Finnish, came with a reward of 50 Bitcoins, marking the beginning of a revolution in digital finance
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It took over 5800 days for Bitcoin to reach this latest milestone of $100,000.
On December 4, a major announcement from Meituan sent shockwaves through the marketThe company disclosed the complete liquidation of its cryptocurrency portfolio, which included approximately 31,000 Ethereum and 940 BitcoinsThe total sales amounting to around $180 million resulted in a profit of approximately $79.63 million (equivalent to about 571 million RMB).
Meituan's venture into cryptocurrency began in 2021, culminating in a profitable exit marked by a 44% profit coinciding with Bitcoin's valuation bumping up to $100,000.
Prior to this, on November 29, Booya Interactive, a Hong Kong-listed gaming development firm, declared that its Bitcoin holdings had reached 3,183 units, positioning it as Asia's largest corporate Bitcoin holder, causing its share price to jump over 230% since November
Many analysts suggest that substantial Bitcoin holdings among corporate players signify a pivotal shift towards mainstream acceptance and utilization of virtual assets, suggesting an increase in liquidity between Bitcoin and traditional assetsConsequently, as Bitcoin prices oscillate, its fluctuating nature risks spilling over into broader markets, creating systemic effects that could impact stock prices, bonds, and even traditional business operations.
Over 60 Companies Hold Bitcoin
The phenomenon of companies holding Bitcoin undeniably started in the United States
One such pioneer, MicroStrategy, possesses over 400,000 Bitcoins, and its stock price saw a staggering cumulative growth of 3000% over five years, once exceeding a market capitalization of $100 billionSince its founder, Michael Saylor, first announced in 2020 the intention to integrate Bitcoin into the company’s assets, this strategy has sparked a global wave of Bitcoin investments among corporations
In the U.Sstock market, other companies such as Interactive Strength, a fitness equipment manufacturer, and Semler Scientific, a medical company, have recently revealed their intentions to invest significant sums into Bitcoin, with plans involving up to $5 million and 1,570 Bitcoins, respectively
AI company Genius Group has also joined the race with a $14 million investment in 153 BitcoinsVarious other firms, including Rumble, Anixa Biosciences, and LQR House, have also made headlines by entering the Bitcoin investment scene
On December 5, Nano Labs Ltd (Haowei), a Chinese concept stock, announced its plan to establish a trading account on HashKey Exchange, a licensed trading platform in Hong Kong, while expanding its investments in virtual assetsThe stock price has notably jumped from $6 per share in early November to $12.02 by December 4.
Another firm, SOS Ltd, recently declared intentions to invest $50 million to purchase Bitcoin along with others, such as Meitu, Booya Interactive, and Coolpad Group, which are similarly diving into the Bitcoin space
“Public data reveals that over 60 companies now incorporate Bitcoin as part of their asset portfolios across various industries,” said Jeffrey Ding, chief analyst at HashKey Group
He further elaborated that a large proportion of Bitcoin-holding listed companies are mining firms, which often maintain long-term Bitcoin positions, while many tech, gaming, internet, and payment companies are increasingly open to virtual assets, incorporating Bitcoin into their asset management strategies
Such companies often explore developing related technologies, such as payment systems or Bitcoin wallets, integrating deeper into the Bitcoin ecosystem
Bitcoin: A Double-Edged Sword
The meteoric rise of Bitcoin has propelled its market capitalization past that of silver, designating it as the eighth-largest asset globallyThe growing trend of publicly-traded companies holding Bitcoin has ignited a plethora of discussions in the capital markets regarding motivations for such holdings, and the ability of companies to navigate the inherent volatility of Bitcoin
Beyond investments, many businesses are beginning to appreciate Bitcoin and stablecoins' utility in the realms of cross-border trade and settlementsJeffrey Ding elaborated, “Traditional fiat currency cross-border settlements face myriad issues, including prolonged processing times, unavailability during weekends and holidays, and significant foreign exchange fluctuations
The immediacy and efficiency offered by Bitcoin and stablecoins are gradually replacing these traditional methods.”
Industry insiders remarked that recent fluctuations in Bitcoin prices and the shorts against MicroStrategy were not surprising, as Bitcoin's volatility soars, a double-edged sword, enabling companies to rapidly enhance asset values in rising markets but threatening drastic stock price drops or short-sell situations in correction phases or markets with skepticism regarding valuations
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