Corporate accumulation of Bitcoin threatens its reserve asset status — Sygnum

Digital asset bank Sygnum warns that MicroStrategy’s Bitcoin accumulation can undermine the cryptocurrency’s potential as a reserve asset for financial regulators. 

Over the past five years, MicroStrategy has acquired 582,000 BTC, or about 3% of the total Bitcoin supply. That said, the firm announces new purchases of the cryptocurrency almost every week. The company last stated the intention to buy 1,045 BTC worth approximately $110.2 million. MicroStrategy's goal is to own 5% of total coins issued.

Sygnum states that a private company controlling a significant part of Bitcoin supply would not only impair the cryptocurrency’s liquidity, but also make it unsuitable for central banks as a reserve asset.

According to Bitwise investment chief Matt Hougan, Bitcoin needs to be accumulated by financial regulators to reach the $500,000 mark. Additionally, at this price, the cryptocurrency will have the same market capitalization as gold, notes Hougan. Yahoo Finance says only the central bank of El Salvador currently holds Bitcoin as part of its reserves.