Digital asset infrastructure company BitGo holds $250 million in bitcoin on its balance sheet, CEO Mike Belshe revealed to CoinDesk in a recent interview.
The disclosure comes at a time when more crypto companies are opening up about their own bitcoin holdings. It’s not unusual for crypto firms to hold the same assets as they’re selling to their customers, but a recent wave of institutional investment has these same firms sharing details about their own investments in crypto assets.
BitGo has had bitcoin on its balance sheet since 2014, Belshe said. One of the first products BitGo pursued in that same year was a multi-sig, multi-user wallet designed in part for treasury management, he added.
While putting bitcoin into treasury became trendy in 2020 with MicroStrategy, Square, MassMutual and others, it’s an asset diversification strategy that BitGo had seen clients practice long before the bull run.
“It’s taken longer for the industry to evolve than we thought it would,” Belshe said.
BitGo’s disclosure comes about a week after leading crypto exchange Coinbase revealed in a blog post that it has held bitcoin and other assets on its balance sheet since 2012.
At the time BitGo added bitcoin to its own treasury, Belshe argued the firm should have the same exposure to the asset its customers were taking on.
“A venture-backed firm taking a position on something other than U.S. dollars for their investment money is a very controversial thing,” Belshe said. “If the founders came to the investors and said, ‘Hey, I’d like to take the cash you gave us and put it in gold, the answer would be, ‘No, you shouldn’t do that.’”
At the time, BitGo developed a liquidity policy that looked at what would happen in the event the digital assets in its treasury went to zero, and has maintained 24 to 36 months of cash runway aside from its digital asset holdings.
“I strongly recommend that companies invest heavily in bitcoin,” Belshe said. “I think the global pandemic has shown that some exposure to digital assets is actually a way to stabilize your business as opposed to destabilizing it.”
Belshe points to insurance funds and pensions allocating 3% to 5% of their cash reserves to bitcoin as a benchmark for other companies thinking about adding bitcoin to the balance sheet. While interest rates remain low, Belshe expects investors to keep pouring into high-yield assets like bitcoin for some time.
“Generally, what people are expecting is a pretty dismal [bond] market for a while,” Belshe said. “The other place you can go right now is the stock market but if those bond rates go up then the stock markets are going to take a hit … so I think people are looking for a general hedge against both markets.”