On-chain data recorded by Arkham Intelligence, a crypto analytics platform, shows that the United Arab Emirates (UAE) currently holds about 6,300 Bitcoin, worth roughly $700 million. Arkham has attributed the holdings to Citadel Mining, a publicly listed Bitcoin miner majority-owned by Abu Dhabi-based Royal Group. The coins were accumulated through the company’s own mining operations rather than open-market purchases, according to the analysis.
With these holdings, the UAE is the world’s fourth-largest state holder of Bitcoin, highlighting the nation’s growing engagement with digital assets. According to public blockchain data, governments now hold roughly 463,000 BTC, which is about 2.3% of the total supply of Bitcoin. This amount, however, is still far shy of the BTC holdings of the largest corporate holder of BTC, the Nasdaq-listed Strategy, which holds over 636,000 BTC – worth aournd $70 billion. The company’s latest purchase was last week, for $449.3 million. Meanwhile, Asia’s largest corporate holder of BTC, MetaPlanet, holds 20,136 BTC, worth just over $2 billion. Like Strategy, the firm aggressively buys Bitcoin on a near weekly basis. Neither company has no plans to ever sell.
Deflationary Bitcoin
With Bitcoin’s total supply capped at 21 million (of which a few million are likely lost forever), and corporation buys have outpaced mining capabilities for most of this year, Bitcoin has become deflationary. In other words, one of the world’s scarcest assets is also deflationary. For anyone in the investment space, Bitcoin is not an asset to sleep on. While its volatility has been shunned, with both governments and corporations stockpiling Bitcoin, this year has seen a sharp; BTC’s three- and six-month rolling volatility, meaning the speed and extent of its price changes over those time periods, has fallen to a historic low.
As JP Morgan wrote in a client note last week:
“Corporate treasuries [alone] now hold over 6% of Bitcoin’s total supply and act as a form of private sector quantitative easing for crypto markets…We believe a factor behind the collapse in Bitcoin volatility has been the acceleration of Bitcoin purchases by corporate treasuries.”
An alternative to Gold?
Many analysts contend that Bitcoin’s “boring” trend now has – and will continue to – become an appealing factor for Wall Street as Bitcoin is “more attractive from a valuation point of view” and making it a stronger competitive alternative to Gold.
Access Crypto closely tracks Bitcoin’s price versus Gold. For most of the past three months, Bitcoin has performed slightly better, though month on month Gold has outperformed Bitcoin by about 10%. However, since 2019, Bitcoin has outperformed Gold every year except 2022; last year Bitcoin surged 135% compared to Gold’s 35%.
The takeaway? Both Bitcoin and Gold are outperforming inflationary cash – by far. Corporations – and governments – that are stacking BTC are using their treasuries in a much more efficient way. And the supply crunch is still to come.