To Buy or Not to Buy: Bitcoin for Institutions
Inside the Buy-Sell Strategies of MicroStrategy, Tesla, and Asia's Bitcoin Tigers
This report was written by Tiger Research, analyzing institutional Bitcoin investment strategies and their impact on corporate financial management across global markets, with a particular focus on Asian adoption trends.
TL;DR
Bitcoin's decentralized nature and inflation resistance make it a versatile tool for institutions to hedge against economic uncertainties and preserve long-term value.
Institutional Bitcoin purchases often signal confidence and innovation, while sales enable profit-taking or cash flow management.
Asia's increasing adoption of Bitcoin as an investment asset and initiatives by governments like El Salvador and the US recognizing it as a strategic asset highlight its growing influence in shaping global economic strategies.
1. Introduction
Bitcoin has garnered attention as an investment asset due to its distinctive characteristics that set it apart from traditional safe assets like gold. Its decentralized and inflation-resistant properties have introduced new possibilities for institutional asset management strategies.
A notable example of an institution strategically leveraging Bitcoin's advantages is MicroStrategy. The company has effectively used Bitcoin to manage inflation risks and strengthen its financial position. This success has prompted global companies and financial institutions to reconsider their investment strategies.
Bitcoin investment, however, may not be suitable for all institutions. Although Bitcoin acquisitions often capture public attention, numerous companies have discreetly sold their holdings. This report aims to analyze the rationale behind institutions investing in Bitcoin, explore the key factors influencing buy and sell decisions among different institutions, and examine institutional strategies in similar market conditions. As Bitcoin’s status as a corporate investment asset continues to rise, this report will also analyze the Asian market's perspective and corresponding strategies.
2. Bitcoin as an Investment Asset: Concept and Benefits
Investment assets, such as bonds, gold, and foreign currencies, are traditionally valued by institutions for their ability to hedge against risk, and sometimes to preserve value during economic uncertainties. Bitcoin has emerged as a strategic investment asset, offering institutions an effective, inflation-resistant, and profitable alternative to traditional assets like bonds and gold. Its fixed supply of 21 million coins ensures scarcity, making it an appealing option for long-term value preservation.
2.1. Bitcoin's Role as an Inflation Hedge
Rodriguez and Colombo’s 2024 study, Is Bitcoin an Inflation Hedge?, analyzes Bitcoin’s response to inflationary pressures using key economic indicators such as the U.S. Consumer Price Index (CPI) and Personal Consumption Expenditures (PCE) data over the past decade. The findings suggest that Bitcoin returns significantly increase following positive inflationary shocks. However, this effect is sensitive to the price index—primarily holding for CPI shocks—and was more pronounced during Bitcoin’s early years before widespread institutional adoption. This indicates that Bitcoin’s ability to hedge against inflation is context-dependent and may diminish as adoption grows.
2.2. Bitcoin’s Profitability as an Investment Asset
In 2024, Bitcoin has recorded a year-to-date return of approximately 127%, significantly outperforming gold, which has risen by 27%, and the S&P 500, which has gained around 24% during the same period.
However, the value of Bitcoin as an institutional investment asset extends beyond its return on investment. Traditional investment assets like bonds have limited trading hours and involve complex transaction procedures, making it difficult to respond quickly to interest rate changes or market shocks.
In contrast, Bitcoin offers global liquidity, unrestricted by borders or time zones, and enables 24/7 real-time trading. Its high liquidity, especially the ability to quickly convert Bitcoin into cash in any country, sets it apart from traditional financial assets. These characteristics allow institutions to manage assets and respond to market conditions effectively.
With its combination of high profitability and practical utility, Bitcoin is expected to become an increasingly important investment asset in institutional portfolios.
2.3. Bitcoin’s Impact as an Attention Economy Lever
As the number of companies listed on Nasdaq has surpassed 3,300, the number of publicly traded companies worldwide has grown to the point where they are nearly impossible to count. As a result, attracting investor attention based solely on strong fundamentals has become increasingly difficult. To enhance their market visibility, companies are now investing heavily in marketing.
In this market environment, Bitcoin has created an additional promotional effect. With only a few publicly traded companies holding Bitcoin, simply announcing Bitcoin purchases as part of a portfolio diversification strategy generates significant media exposure.
Such media coverage has yielded several positive outcomes for companies, enhancing their brand value, capturing the interest of retail investors, and bolstering their image as innovative and forward-thinking. Beyond increasing asset value, Bitcoin also plays a role in elevating corporate value.
3. Buy-Sell Institutional Behavior
As Bitcoin has become a fixture in institutional investment portfolios, a unique trading pattern has emerged. Institutions often publicly announce their Bitcoin purchases, sending a strong signal to the market. This strategy helps highlight the company’s innovative stance and enhances market confidence. In contrast, Bitcoin sales have been discreetly executed, typically occurring during profit realization and reinvestment of funds to strengthen core business operations.
3.1. Institutional Buying Behavior: MicroStrategy
MicroStrategy stands as a leading example of leveraging Bitcoin as an investment asset. By allocating over 446,400 $BTC, the company has garnered significant market attention. This strategy was designed to achieve two key objectives: defending against inflation and strengthening financial stability.
CEO Michael Saylor has captured the market's attention by completely transforming his perspective on Bitcoin. A former skeptic turned passionate advocate, he emphasized, "Cash, low-yield bonds, and overvalued tech stocks are vulnerable to inflation and should be avoided." In the current market environment, Saylor has proposed stock buybacks and Bitcoin as the optimal use of corporate surplus funds, choosing Bitcoin as a long-term hedge against unlimited quantitative easing.
Contrary to early concerns, MicroStrategy’s Bitcoin investment strategy has gained widespread support among many companies. Beyond serving as an inflation hedge, Bitcoin is now recognized as "digital gold," reshaping the corporate approach to asset management. This innovative move to diversify reserves with Bitcoin, in addition to traditional assets, has set a new direction for global corporate financial strategies.
MicroStrategy’s success story is also influencing the Asian market. Boyaa Interactive has converted its Ethereum holdings into Bitcoin, and MetaPlanet has aggressively acquired Bitcoin in 2024. These moves reflect the growing recognition of Bitcoin’s utility for volatility management and long-term value preservation in the Asian market.
3.2. Institutional Selling Behavior: Tesla
Tesla, one of the most visible corporate adopters of Bitcoin, provides a contrasting example to companies such as MicroStrategy. The company sold 75% of its Bitcoin holdings in 2022, attributing the decision to liquidity needs during uncertain economic conditions. More recently, in October 2024, Tesla transferred $760 million worth of Bitcoin to unknown wallets, raising speculation of further sales.
Tesla’s Bitcoin investment have been strategically utilized to support its operational and expansion needs, including the construction of new factories in Austin, Texas, and Berlin. According to Tesla’s CFO Zachary Kirkhorn, the investment in Bitcoin has provided the company with liquidity and a level of return, demonstrating its flexibility as a financial tool for capital-intensive projects.
Similarly, when Bitcoin reached $100,000, Meitu secured a significant profit from its sale. Compared to Tesla’s strategic profit-taking, Meitu’s decision appeared to be a deliberate move to capitalize on market highs. Unlike Tesla, which kept its actions low-key, Meitu openly explained the sale as a step to bolster its financial position amid challenges in its core business. This level of transparency, though uncommon, offers a contrast to Tesla’s secrecy, suggesting that public disclosure can help reduce market uncertainty caused by institutional sales.
Institutions buy and sell Bitcoin for strategic reasons tied directly to their financial goals and operational needs. Companies often sell Bitcoin to realize profits during market peaks, as Tesla did in 2024, or to reinvest in their core business, as seen with Meitu converting its crypto holdings into operational capital. The main reasons behind selling activity can typically be categorized as follows 1) taking profits during favorable market conditions to expand and improve business operations or 2) needing funds to address cash flow challenges. This raises questions about whether any sale in the future is driven by strategic financial planning or as a stopgap measure to address cash flow issues. Furthermore, if the sale is motivated by taking profits, it raises questions about how those profits will be utilized. Are they being reinvested to enhance the business or primarily benefiting stakeholders? Regardless, such actions can result in missed opportunities for further appreciation and diminish the long-term advantages of holding Bitcoin as an investment asset.
4. Buy-Sell Behavior in Asia
MetaPlanet is a leading example of aggressive Bitcoin adoption in Asia. True to its nickname, "Asia's MicroStrategy," the company demonstrated its strong commitment to long-term Bitcoin investment by purchasing 1,018 BTC in 2024 alone.
MetaPlanet's case highlights a successful transformation of a "zombie company." Zombie companies generate just enough profit to cover operating costs and debt repayments, yet lack the capital to fuel growth. Despite holding significant cash reserves, MetaPlanet had failed to attract attention in the stock market. By benchmarking MicroStrategy’s strategy, the company managed to execute a successful turnaround.
In addition to Bitcoin investments, MetaPlanet has announced plans to expand into new business areas. The company’s strategy includes using various financial instruments, such as loans, stocks, and convertible bonds, to acquire Bitcoin, alongside profit generation through put options. This approach has been praised as an active revenue model that goes beyond simple asset holding.
However, this strategy is not universally applicable to all zombie companies. Success depends on the ability of firms that have already established a strong presence in their respective stock markets to implement differentiated strategies. Unfocused imitation by latecomers could exacerbate risks. A cautious approach is necessary, considering factors such as the company’s cash reserves, market conditions, and risk management capabilities.
5. Conclusion and Key Takeaways
In conclusion, Bitcoin’s evolution as an investment asset marks a significant shift in institutional finance. Its decentralized nature, inflation-resistant properties, and unparalleled liquidity make it a compelling option for diversification and long-term value preservation.
Some governments are also exploring Bitcoin’s potential. El Salvador’s adoption of Bitcoin as legal tender is one example that highlights the asset’s role in national strategies for economic growth and financial inclusion. Recently Trump announced that the US will adopt Bitcoin as an investment asset or as he said “a permanent national asset to benefit all Americans”. These governmental moves show that Bitcoin’s growing relevance is not only for corporations but also for policymakers aiming to modernize financial systems.
Both buying and selling Bitcoin have proven beneficial to companies, particularly during market uptrends. In an uptrend, buying signals confidence in Bitcoin’s growth potential, while selling allows firms to realize profits and reinvest in core operations. However, in a downtrend, these activities can invite scrutiny. Buying may raise concerns about whether business funds are being risked on speculative investments while selling could prompt questions about whether the company is cutting losses or liquidating assets to cover operational expenses.
For decision-makers, the implications are clear: Bitcoin's potential as an investment asset is vast but requires careful integration into corporate strategies. Companies must weigh the financial benefits of holding Bitcoin, such as liquidity and inflation resistance, against operational risks and associated market volatility. Effective use of Bitcoin, whether for long-term reserves or short-term liquidity needs, demands careful alignment with business objectives and market conditions.
🐯 More from Tiger Research
Read more reports related to this research.Disclaimer
This report has been prepared based on materials believed to be reliable. However, we do not expressly or impliedly warrant the accuracy, completeness, and suitability of the information. We disclaim any liability for any losses arising from the use of this report or its contents. The conclusions and recommendations in this report are based on information available at the time of preparation and are subject to change without notice. All projects, estimates, forecasts, objectives, opinions, and views expressed in this report are subject to change without notice and may differ from or be contrary to the opinions of others or other organizations.
This document is for informational purposes only and should not be considered legal, business, investment, or tax advice. Any references to securities or digital assets are for illustrative purposes only and do not constitute an investment recommendation or an offer to provide investment advisory services. This material is not directed at investors or potential investors.
Terms of Usage
Tiger Research allows the fair use of its reports. ‘Fair use’ is a principle that broadly permits the use of specific content for public interest purposes, as long as it doesn't harm the commercial value of the material. If the use aligns with the purpose of fair use, the reports can be utilized without prior permission. However, when citing Tiger Research's reports, it is mandatory to 1) clearly state 'Tiger Research' as the source, 2) include the Tiger Research logo(Black/White). If the material is to be restructured and published, separate negotiations are required. Unauthorized use of the reports may result in legal action.
 | A guest post by
|