River: Corporate clients reinvest an average of 22% of their profits into Bitcoin (BTC)

CN
1 day ago

Bitcoin financial services company River stated that its corporate clients are reinvesting an average of 22% of their profits into Bitcoin, indicating that grassroots adoption is on the rise.

Among River's client base, real estate companies are the largest adopters, with nearly 15% reinvesting profits into Bitcoin, while the allocation in the hotel, finance, and software industries ranges between 8% and 10%, according to River research analyst Sam Baker in a report on Wednesday.

Even fitness studios, painting and roofing companies, and religious non-profits are among the adopters.

Baker noted that such businesses quietly acquired 84,000 Bitcoins by 2025—an impressive reserve that accounts for about a quarter of the accumulated holdings of institutional fund management companies and corporate Bitcoin treasuries.

"While Bitcoin treasury companies have received most of the media attention, the adoption of traditional businesses that use Bitcoin to supplement their existing business models is often overlooked," he added.

Baker stated that improvements in Bitcoin accounting standards, regulatory clarity, increased institutional acceptance, and a strong bull market have created "the ideal conditions for the widespread adoption we are witnessing today."

Corporate and institutional Bitcoin adoption has been one of the biggest catalysts behind Bitcoin's rise to $124,450 in this bull market.

There was a time when the amount of Bitcoin purchased by spot Bitcoin exchange-traded fund issuers was ten times the amount miners could produce, driving up the price of Bitcoin.

This contrasts sharply with the 2020-2021 bull market cycle when corporations largely sat on the sidelines, and Bitcoin broke through $69,000 primarily under retail speculation.

Baker pointed out that 75% of the employees in the businesses he serves have 50 or fewer employees, and he believes that small companies find it easier to adopt Bitcoin due to fewer barriers involved.

On the other hand, large companies that make adoption decisions through committees are more likely to follow norms and avoid controversy, Baker said, which explains why so few S&P 500 companies hold Bitcoin.

However, River found that over 40% of businesses allocate 1% to 10% of their funds to Bitcoin, while only 10% invest more than half of their net income into cryptocurrency.

For small companies, Bitcoin purchases can be quite modest—less than $10,000. Last week, Western Main Self Storage in Rhode Island purchased only 0.088 Bitcoin, worth $9,830, bringing its total holdings to 0.43 Bitcoin.

Despite the increase in adoption rates, Baker stated that most businesses have not even considered Bitcoin, citing "widespread misconceptions and limited awareness."

He referenced a survey from Cornell University, which found that only 6% of Americans know that the Bitcoin supply cap is 21 million, while another survey revealed that 60% of Americans admitted they know "little" about cryptocurrency.

Related: Trump-related American Bitcoin (ABTC) trading was halted five times on its first day due to a surge in volatility.

Original: “River: Corporate clients reinvest an average of 22% of profits into Bitcoin (BTC)”

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