Mid-Cap Firms Follow MicroStrategy\'s Lead, Seeing Stock Value Increases by Adopting Bitcoin Treasury Strategies

Bitcoin (BTC) is quickly becoming the de facto currency for mid-cap corporations and nonprofits, according to Abra CEO Bill Barhydt.

Mid-cap corporations and nonprofits are adopting Bitcoin treasury strategies, leading to substantial stock value increases, similar to the approach taken by MicroStrategy, according to Abra CEO Bill Barhydt.

What Happened: Bitcoin (BTC) is quickly becoming the de facto currency for mid-cap corporations and nonprofits, according to Abra CEO Bill Barhydt.

This development is in line with the approach taken by MicroStrategy (NASDAQ:MSTR), whose stock has appreciated because of its large Bitcoin holdings, Coingape shares.

"We’re seeing kind of post what’s happened with MicroStrategy, a whole bunch of particularly midcap companies, even nonprofits, come to us and say, ‘Hey look, we saw your announcement about your new registered investment advisor separately managed accounts,'” Barhydt explained during an interview with CNBC, he went on to say, "They love that model for holding crypto."

One element propelling this change is the widespread belief that currency is an asset whose value declines over time. The market has a long-standing practice of treating cash on hand as a zero on balance sheets. But if you swap it out for an asset that’s going up in value, suddenly they aren't written off; in fact, they get a boost just for existing on your books.

"Companies are seeing a beneficial effect on their stock values as a result of substituting cash with Bitcoin, an asset that is gaining."

Barhydt explained that MicroStrategy's stock has been appreciating because the company has effectively included Bitcoin in its financial statements. But if you swap it out for an asset that’s going up in value, suddenly they aren't written off; in fact, they get a boost just for existing on your books

"Several midcap public firms have seen substantial gains in their stock value after implementing this method," Barhydt shared. When asked about companies that had replaced cash with Bitcoin, he mentioned several midcap public companies whose shares saw a significant overnight increase of 20, 30, or 40%.

Nonprofits are also participating in this movement. Barhydt claims that some charities are shifting their funds to Bitcoin with the goal of keeping it for the long haul and using its value to pay for operations. It adds another layer to the institutional adoption story, which is already being fueled by the Spot Bitcoin ETFs.

"Nonprofits have begun to convert their money into Bitcoin," he added. The chief executive officer of Abra also stressed that these groups "intend to hold that forever if they can."

Barhydt also highlighted the fact that these non-profits can "actually borrow against the Bitcoin so they can fund their operations by borrowing a depreciating asset against the value of an appreciating asset."

See More: Best Cryptocurrency Wallets

The above is the detailed content of Mid-Cap Firms Follow MicroStrategy\'s Lead, Seeing Stock Value Increases by Adopting Bitcoin Treasury Strategies. For more information, please follow other related articles on the PHP Chinese website!