In the past decade, the number of people investing in cryptocurrency or Bitcoin has grown exponentially. Its use cases and investments are so widely spread that people speculate that it can become the next global reserve currency or widely accepted asset, just like gold.
Bitcoin investment can give massive profits, but due to its volatility many are still apprehensive about investing in it. There is no denying that bitcoin is a risky investment instrument, but it is much more stable compared to back when it originated in 2012, now in 2022.
As the use case of bitcoin is growing, the traditional finance segment of the world realizes that they would either must start adopting this currency or will start facing irrelevance. Seeing this, many businesses have started adding Bitcoin to their investment portfolios.
Reasons why businesses are investing in Bitcoin
Hedge against currency inflation
Currency value fluctuates equally with the inflation level. But such is not the case with digital assets like Bitcoin. For example, when doing international business and the value of the domestic currency drops due to inflation, it is a loss. On the other hand, bitcoins have global values which do not move with a single country’s inflation. Thus, the business is hedged against inflation by having bitcoins in its portfolios.
Less transaction cost burden
Doing monetary transactions usually leads to paying additional processing fees. Banks charge it as a service fee for completing the transaction instead of the parties. But cryptocurrencies do not have a governing authority. There are zero or very minimal transaction fees. The more businesses start transacting using bitcoin, the lesser money will be lost as transaction fees.
More transparency in business transactions
Transparency is one of the best characteristics of bitcoin, and it is also why the currency is widely accepted by many platforms and even used for transactions. Every transaction using this digital currency is recorded in a public ledger and is visible to all but is also unchangeable. This makes it impossible to commit fraud and does any manipulation. Thus, now it is time for even businesses to benefit from this feature.
Invite more customers
As more and more people are getting involved with bitcoin, businesses should start accepting the currency as a payment mode to get them onboard. Adding this digital currency as a payment option can increase the customer base by around forty per cent.
Changing with the time
Looking at the pace with which bitcoin is becoming a mode of transaction and an investment option, its technology is also changing. Therefore, it becomes mandatory for businesses to adopt bitcoin to stay afloat on the market.
Top companies investing in bitcoin
Several institutional investors are buying bitcoins and among these are some very known public companies. Here’s the thing, investing in a public company with bitcoin in its portfolio will expose one to the bitcoin market. Such a strategy can deem profitable in many ways.
Here’s a list of top public companies investing in bitcoin
MicroStrategy has embraced bitcoin as its primary reserve asset. Michael Saylor, CEO of MicroStrategy, believes that the return on gold as a reserve asset is not as profitable as bitcoin.
Tesla has also joined the party of companies that hold a significant bitcoin. The company CEO, Elon Musk, even sold 10% of bitcoin holding in 2021 to prove that the currency is as liquid as holding cash in hand.
Voyager Digital LTD
Voyager is a crypto brokerage firm that approximately holds 12,260 BTC. The company’s CEO, Stevan Ehrlich, witnessed increased adoption of bitcoin and cryptocurrencies as an investable asset and upgraded to become a cryptocurrency brokerage platform.
Galaxy Digital Holdings
Galaxy Digital Holdings is a merchant bank wholly focused on the crypto industry and is counted as the largest institutional holder of Bitcoin. The institution was founded in 2018, and the founder, Micheal Novogratz, encourages crypto investments and advises to stay cautious of its volatility.
Formally known as Square, Block is also a major institutional investor of Bitcoin. Its first bitcoin investment was in 2020, and since then, it has continued to deal in this digital currency actively. One reason behind this is the CEO, Jack Dorsey, claims to be a bitcoin advocate.
So, if one feels that they are missing out on some big profits by not investing in bitcoin, they can get started through trusted platforms like crypto software. As a beginner, one should do complete research before following these large institutional investors.