Who’s Buying Crypto in a Recession?

#1. MicroStrategy

MicroStrategy tops this list simply if for nothing than its iconic Bitcoin run so far. The business intelligence software company formerly helmed by Bitcoin evangelist Michael Saylor first forayed into crypto on August 11, 2020. At the time, the company cited inflation concerns sparked by the Fed’s slashing of interest rates in response to Covid lockdowns’ squeeze on the economy. Also, it was unheard of up until that point for a public corporation to plow big money into crypto.

Two years later, the Nasdaq-listed company continues to trail blaze for other corporations who would take the plunge. And one thing that it has proven is whether the markets are favorable or not, it will still buy Bitcoin. The latest of such buys was between May 3 and June 28 of this year, with the company spending $10 million for 480 bitcoins going for approx. $20,817, per a filing with the United States Securities and Exchange Commission (SEC).

At the time of writing, MicroStrategy holds the most Bitcoin of any public company. And unlike other corporations such as Tesla that have “weak hands,” Saylor has maintained MicroStrategy is not about to sell its Bitcoin anytime soon. One wrinkle, however, is that Saylor recently announced he’s stepping down as CEO and will assume a new role as executive chairman of the company. It remains to be seen how that will affect the company’s Bitcoin acquisition strategy.

#2. BlackRock

BlackRock’s recent developments signal potential investors are looking to dip their toes in the asset class despite the prevailing crypto winter. This month, BlackRock — the largest asset manager in the world, announced that it would be launching a spot Bitcoin private trust for its US institutional clients.

That statement came right after the company leaped on the crypto bandwagon the week prior via a partnership with Coinbase to expose its institutional investors to crypto directly. “Our institutional clients are increasingly interested in gaining exposure to digital asset markets…”, observed BlackRock’s Global Head of Strategic Ecosystem Partnerships Joseph Chalom on the Coinbase blog.

Through the Coinbase Prime and Aladdin integration, BlackRock’s institutional investors will get to “manage their Bitcoin exposures directly in their existing portfolio management.” Coinbase Prime is the exchange’s offering for institutional investors, with Aladdin being the portfolio management platform for BlackRock.

“Despite the steep downturn in the digital asset market, we are still seeing substantial interest from some institutional clients…” the company’s statement reads. Its experiment with cryptocurrency illustrates that despite the economic decline, institutions think of crypto as a legit investment option.

#3. El Salvador

As we covered in 2021, El Salvador decided to make Bitcoin legal tender. Citizens were given the incentive of bitcoin worth $30 to download the national Bitcoin wallet Chivo — although that’s controversial.

Since then, the government has bought Bitcoin at various intervals to shore up the cryptocurrency’s reserves. The last buy was in July; with Bukele divulging on Twitter the country had secured 80 bitcoins each for $19,000. The last purchase before that was in May when the country acquired 500 coins at the ballpark price of $15 million.

Bukele had planned to issue a Bitcoin bond, a.k.a. a volcano bond, in the third week of March. But those plans fell through due to the currency’s continued fall, per Reuters. Finance Minister Alejandro Zelaya told the local TV show Frente a Frente that the war in Ukraine had made market conditions unfavorable.

Bukele planned to use the bonds’ proceeds to fund the “Bitcoin City.” The idealistic city that pundits have slammed as a “crypto utopia” would have “no income tax, zero property tax, no procurement tax, zero city tax, and zero CO2 emissions”, according to the president.

#4. Kraken CEO Jesse Powell

If any crypto investor feels jaded, perhaps they can feel better knowing Kraken CEO Jesse Powell’s position: he’d “never bet against bitcoin,” and he bought Bitcoin despite the “craziness” in the macroenvironment. Powell told Bloomberg TV that he recently bought Bitcoin at $18,000 and that he’s “happy to ride all the way back up.”

Bitcoin touched below $17,000 on June 18, 2022, recording one of its lowest prices since before its bull run in 2017. The crypto pioneer is often a reliable indicator of how altcoins will behave.

Powell disclosed this after the chat host reminded him of his bullish Bitcoin forecast for 2021. At the time, the Kraken exec predicted one bitcoin would buy one Lamborghini, and by the end of 2022, one bitcoin would buy a Bugatti. But as we know now, the crypto’s price hasn’t exactly inspired Lambo buying sprees.

That being said, Powell remains bullish on the cryptocurrency’s price at the close of the year. He’s hopeful that he still might be able to get himself a Bugatti this year. He also praised Bitcoin’s upgrades: “I’m still bullish on the long run — the fundamentals keep improving. I would never bet against Bitcoin.”

The Bottom Line

It’s exciting that people are still actively buying crypto or expressing interest. Perhaps the most fascinating of them all is BlackRock’s institutional investors’ ballooning interest in the asset class. Not only does it open up the possibility of the ‘silent majority’ being the ones driving trends in the space, but it’s also a testament to the fact that crypto remains a legitimate alternative to conventional investment options.