The 2019-2023 period has been a revolution for the finance and investment universe. Bitcoin, we know, has been a major player, although it is only the tip of the iceberg.
If we draw a historical parallel, we can almost say that trading and investing in cryptocurrencies is the “gold rush” of the moment, in reference to the desperate search for the golden metal in mid-19th century California.
Many companies have begun to explore the vein and bolster their treasury with digital assets. This behavior, in turn, has had an impact on the rapid appreciation of Bitcoin and other cryptocurrencies.
A Deloitte report examined the trend of companies starting to allocate part of their funds to the purchase of cryptoassets.
Some examples:
- MicroStrategy, a company dedicated to the development of artificial intelligence software, who acquired more than $1 billion in Bitcoin in 2020.
- Tesla, automaker, which in February announced the purchase of 1.5 billion dollars in Bitcoin (incidentally, the attitude of CEO Elon Musk and his influence on the price of digital assets is enough material for an article).
- Twitter has also shown signs of mulling the acquisition of these assets: Jack Dorsey, the company’s CEO, is an acknowledged Bitcoin advocate.
Why do companies invest in cryptocurrencies?
The founders of some major companies believe in Bitcoin. Yes, the enthusiasm of some big players, such as the aforementioned Musk, Dorsey and MicroStrategy’s Michael Saylor, among others, has driven their companies to acquire cryptoassets, triggering a cascading effect in other companies.
Saylor said in 2020, in an interview, said he sees Bitcoin as a hedge against currency debasement and inflation.
Dorsey is a fascinated by the stronger digital currency which undoubtedly drove the Square acquisition, while, for Tesla the multi-billion dollar investment in Bitcoin has been a strong marketing pull to the company’s benefit.
Customer demand could also be driving some companies to enter the crypto world, as more and more people and investors buy Bitcoin and need a “safe place” to put their assets.
Such a scenario led BNY Mellon, the oldest bank in the United States, which is not known for making risky bets technologically speaking, to say it will allow digital asset transfers to its clients.
Another factor that plays in favor of cryptocurrencies is that, unlike in the past, more and more governments are accepting these virtual currencies.
Today there is more regulatory clarity, for example, the U.S. administration has adopted a laissez-faire approach to the issue, even though many illegal activities associated with the management of cryptoassets continue to occur.
There is another reason that has driven the use of Bitcoin by large businesses and companies. It’s simple: cryptocurrencies serve multiple purposes as:
- Their potential is practically infinite, it goes far beyond constituting a way to send money without the need for financial intermediation.
- So-called stablecoins, which could enable very fast transactions for some types of assets.
Is volatility an opportunity?
The fact that several major companies have started buying cryptocurrencies triggered general interest. Adding to that push is the attention of retail investors.
Professional investors, billionaires and even publicly traded companies acquired crypto assets and became interested in blockchain (the revolutionary secure authentication technology that is the basis of digital currencies).
Leading us today to a scenario where cryptocurrencies have gone from being a hobby or a simple high-risk investment to being considered, in addition, a source of income.
The global COVID-19 pandemic forced a series of digital reforms for large and small businesses, we can say that we have seen an evolution of years in months.
Despite the fall of Bitcoin last May, and the knock-on effect this has had on almost all altcoins, we have witnessed an explosion of players and companies accepting or offering Bitcoin as a means of payment.
Some companies even go so far as to have cryptocurrencies as the basis of their balance sheet, instead of cash.
Yahoo Finance compiled a list of the top publicly traded companies that, while not cryptocurrencies, have some level of exposure to cryptoassets either as investments, partnerships or side companies that deal in cryptoassets:
Do you know any of these brands mentioned? , do you think about making this type of investment? , do you want to be up to date with the latest trends? Enter our blog and find out more business news.
