7 Most Influential Companies on Cryptocurrency

The high popularity of crypto has caught the attention of giant companies such as Microsoft, Google, and Facebook. How do these companies use crypto and why they're so impactful for the cryptocurrency market?

For years, the idea of digital currency being mainstream and gaining any significance or value in the financial market would have been considered laughable. Once, a man named Laszlo Hanyecz even had 10,000 BTC and somehow agreed to sell it only for two pizzas! The story then became so viral that the date of the transaction – 22 May – is now widely known as Bitcoin Pizza Day by many crypto enthusiasts in the world.

But despite being ridiculed and laughed at in the past, cryptocurrency has proven its worth. It's hard to miss the crypto craze phenomenon when most news headlines and economic discussions are talking about it these days. Particularly due to the recent COVID-19 pandemic, many people have begun to realize the true potential in the virtual currency that was once considered extremely volatile to the point where it's seen as a bad investment.

As crypto popularity steadily increases, many people are starting to invest, buy virtual coins and use them for various purposes. Not wanting to miss the excitement, several giant companies have begun to show interest in cryptocurrency, especially the biggest crypto Bitcoin. The crazy enthusiasm surrounding crypto apparently has given these major business actors the idea to take the lion's share of the market and aim to control it in the long term.

According to CryptoTreasuries, as of 28 June 2021, 34 public companies collectively hold over 213,000 BTC. In total, these numbers represent 1.14% of the whole Bitcoin in circulation.

Interestingly, the list is not limited to blockchain and Bitcoin mining-related companies only. Some actually don't operate businesses that involve digital assets at all. For instance, the business intelligence software company MicroStrategy and the electric-automobile manufacturer Tesla both hold a large sum of Bitcoin in their possession. So, what do they do with the cryptos, and how big is their impact on the crypto market?

MicroStrategy Inc.

MicroStrategy Inc. is a Virginia-based company that specializes in business intelligence, mobile software, and cloud-based services. It's also known as the largest Bitcoin holder corporate in the world. Last September, the CEO of MicroStrategy, Michael J. Saylor, even decided to sell off a part of the firm to purchase 5,050 BTC or equivalent to around $243 million, which brings the company's total Bitcoin holdings to $5.1 billion. The purchase of such an enormous amount only solidifies its lead in the crypto world. This means any significant move by the company can potentially impact the crypto market in any direction.

MicroStrategy's CEO has been known as a leading advocate of Bitcoin for a while. On his Twitter, Saylor constantly endorses Bitcoin and even advertises the coin in his cover image and profile photo. His company made its first investment in August 2020 and adopted Bitcoin as its main treasury reserve asset, which means the coin is used in their day-to-day cash management. Purchasing and holding Bitcoin has become part of the company's strategy since then.

Moreover, the company's strategy to buy and hold Bitcoin apparently proved to be successful for its balance sheet. They even move beyond putting cash on Bitcoin by actually selling a portion of the company's shares to fund its Bitcoin purchases, according to the statements filed in the US SEC regulators. The successful strategy even caught the attention of an LA-based trillion-dollar asset manager, Capital International Group, who bought a 12.2% stake in the company, making it the second-largest shareholder in Microstrategy after BlackRock's $700 million stakes.

Tesla

Electric automobile manufacturer, Tesla, also joined the ranks of companies holding Bitcoin. The SEC filing recently revealed that the company has invested an aggregate of $1.50 billion in cryptocurrency and holds a total of 43,200 BTC.

The CEO of Tesla, Elon Musk, is perhaps one of the most influential figures in the world of crypto. Even a single tweet from the multi-billionaire could spark price swings in the crypto market. For instance, in June, he only posted a meme about the coin, and the value immediately fell by 7%. The other day, he tweeted "Bitcoin" followed by a diamond and a hand emojis during the Bitcoin value drop, implying that he wouldn't sell the crypto. If you don't know, the term "diamond hands" refers to traders who believe in the eventual profitability of an asset so they keep holding them while the value drops. The tweet immediately became headlines and trended on Twitter.

If we look at Musk's track record, we'll see that he has indeed given many impacts to the crypto world. After announcing his Bitcoin buying worth of  $1.5 billion to gain more flexibility in diversifying and maximizing returns of his company, the value of Bitcoin rose nearly 50%.

Tesla also announced that it planned to start accepting Bitcoin as a payment method for its product, but later in May decided to take a U-turn on the statement due to concerns about the bad environmental impact of Bitcoin mining. Musk stated that while crypto is a good idea on many levels, but it shouldn't come with a great cost to the environment. This announcement alone has caused BTC and the whole crypto market to plummet.

However, it's worth noting that in July 2021, Musk hinted that Tesla would "most likely" accept Bitcoin but only if crypto miners can show that they're using at least 50% clean energy. Following the announcement, Bitcoin prices started to rise along with several other coins in the market.

Tesla's Bitcoin holdings are currently worth about $1.37 billion. With Musk continuously impacting the market with his statements and actions, many believe that following Tesla's acceptance of Bitcoin, BTC's price will rise further and perhaps break its price record, which currently stands at $64,804.72.

Microsoft

In contrast to the two previous companies we mentioned, the ex-Microsoft chief Bill Gates actually didn't trust Bitcoin. He stated that his investments are not chosen based on what other people value. Instead, he was more interested in companies that create malaria and measles vaccines. Nonetheless, Microsoft is starting to enter the crypto world recently.

In 2014, Microsoft declared that it would accept Bitcoin as a method of payment at Xbox and Windows online stores, so customers can top up their Microsoft accounts by using BTC. But in 2016, the Microsoft community was shocked by an announcement on the company's support page that said that the company would no longer accept BTC on Microsoft Store and the Windows Store. However, this was apparently a false alarm as the company later apologized for the inaccurate information.

Microsoft's further involvement in the crypto industry began once it obtained a patent that allows them to build software to assist users in developing blockchain applications. The software basically facilitates a more efficient creation of crypto tokens for many distributed ledgers. This can be very helpful considering that the process of actually generating and managing tokens is pretty complex and burdensome.

In addition, one of Microsoft's products, Microsoft Azure, is also used as a crypto payment platform by a London-based fintech company Wirex. Through the platform, Wirex has made 10 integrations with various currency providers, crypto brokers, and exchanges.

Google

The globally known company Google finally decided to lift its ban on crypto ads for its advertising platforms back in June 2021. However, the ban still applies to many other companies as only a few ed companies are allowed to advertise on the platform. Though it might look small, the recent shift in Google's advertising policy has been interpreted as a signal that the tech giant might make a turn towards crypto sooner or later. Another notable move is shown by the support of Coinbase Card in Google Pay. It basically functions as a digital wallet for storing and managing digital currencies.

Facebook

The giant tech firm Facebook aims to create a new revolution within the finance industry. For this reason, the company has planned to release Diem, a Facebook-backed cryptocurrency, before 2021 ends. Formerly known as Libra, Diem has faced a lot of skepticism from regulators. Two of its major supporters, Visa and Mastercard, even blatantly backed away from the project. Even so, Diem continues to develop and is currently in the process of a complete makeover in order to secure a payment license from Swiss financial regulators.

Moreover, Facebook plans to introduce the Novi wallet to support Diem. The wallet will be launched to reduce transfer times and transaction fees among crypto users. All in all, if Diem gets approved, the company will definitely make a huge fortune out of it. There's even a chance that Diem would make a strong competitor to the famous Bitcoin, considering how big the power Facebook has in terms of users' reach and advertising.

Ark Invest

Cathie Wood, the CEO of Ark Invest, firmly believes that Bitcoin will hit $500,000 in the next five years. Wood has always been known as a supporter of cryptocurrency, particularly Bitcoin. Even when China announced the ban on Bitcoin in June, Wood still thinks that the ban can be a good move in the long run. She also went against Elon Musk's concern regarding Bitcoin's negative impact on the environment and claimed that Bitcoin is an "environmentally conscientious" currency.

Her strong view on Bitcoin can be easily seen in Ark Invest, which provides consultation on crypto investments. The company is even planning to release its own Bitcoin Exchange-Traded Fund (ETF). Recently, Ark Invest included an option for "exchange-traded funds domiciled in Canada" in its prospectus.

Square Inc.

Square Inc. is a financial service company owned by Twitter CEO, Jack Dorsey. The company currently holds 8,027 BTC worth $220 million. It first bought some BTCs in October 2020 and continued to expand its portfolio. In its recent earnings release, the company said that the Bitcoin investment is a part of Square's ongoing commitment to Bitcoin and will continue to assess its aggregate investments on an ongoing basis.

Recently, Square also announced its new "Bitcoin business" called TBD. It's still unclear whether they're going to keep the name or not, but the plan is there nonetheless, so it's something we can look forward to. Apart from that, Square also allows users to buy digital currencies via the Cash App. The coins are stored in Square's digital wallet, which is available online and offline.

Conclusion: The Future of Cryptocurrency

Following the success of cryptocurrency in various parts of the world, many top global companies have shown interest in crypto and blockchain technology. Big companies such as Facebook, Microsoft, and Google have all signaled a shift in their policies regarding how they view and treat digital currencies.

If cryptocurrency continues to develop and gain popularity in the next few years, these companies won't have much choice but to adapt and adopt them in their systems anyway. And if they all do decide to become huge crypto holders and dominate the market, then the dynamics in the crypto market might significantly change, as what happens to Bitcoin after Tesla's investment. But let's save that discussion for another day. In the meantime, this is an excellent opportunity to learn and explore the world of crypto as much as possible so that it can benefit us in the long term.