In recent times, we've seen the interest in bitcoin and cryptocurrencies in general grow to a very high percentage. These rise in awareness has attracted a lot of big players in the traditional finance industry.
Just last week, MicroStrategy, one of the biggest business intelligence companies announced that it had acquired about 21,500 Bitcoin. This acquisition was significant on various levels. To start with, MicroStrategy's choice to keep its reserves in Bitcoin instead of fiat is a vote of trust in the cryptocurrency.
Secondly, the maximum supply of Bitcoin is 21 million which makes MicroStrategy holdings 0.1% of all Bitcoins ever in existence.
I totally believe that MicroStrategy's choice to buy Bitcoin was a decision in the right direction as organizations currently have the perfect conditions to put resources into Bitcoin. There are many reasons why big companies ought to consider putting resources into Bitcoin bot now and in the future, here are three of them.
1. Bitcoin emerged out of a crisis.
The response of governments and national banks in the midst of emergency is consistently similar regardless of the event that it is, be it an economic-financial breakdown, a war, or a pandemic. They print more cash to stimulate the economy. While quantitative facilitating is useful to keep economies from breakdown, infinitive quantitative facilitating can cause the value of fiat assets to deteriorate greatly. This particularly hits organizations that hold millions in fiat as a reserve.
For the most part, companies would build their gold reserves. However MicroStrategy decided to purchase Bitcoin. One may inquire as to why? The appropriate answer is extremely basic - diversification . Albeit regularly contrasted with gold, Bitcoin is a totally new resource class regardless of whether the two supplies are limited.
As earlier mentioned, the maximum supply of Bitcoin is 21 million, which is its fundamental attribute - digital scarcity.
Bitcoin's shortage is in opposition to fiat's inflationary nature which makes Bitcoin an incredible store of significant value.
While we don't have the foggiest idea who precisely created Bitcoin, we know without a doubt that it was a response to the economic crisis in 2008 as there are different references by its Creator Satoshi Nakamoto, Subsequently Satoshi designed Bitcoin as an asset that would not have the deficiencies of conventional ones which is value in times of crisis.
2. Bitcoin has become more institutional and regulated.
Times change very quickly in the crypto space. While a few years back there were no institutional arrangements available, this has changed radically. There is almost no area of Bitcoin where there isn't a product or service available that meets institutional standards for companies or organizations entering the space.
Purchasing Bitcoins in 2010 would have required you to meet with your vendor in person to trade your coins against fiat. This would not be an ideal solution for an organization looking to put millions into Bitcoin.
Today there are many exchanges and OTC desks that have speciality in huge volumes trade brokerage ideal for companies who are keen on exchanging their fiat into Bitcoin.
In the past, there were a lot of barriers in the aspects of buying and storing Bitcoin for companies, the scene has changed as the market is brimming with suppliers that fulfill institutional guidelines and offer proficient types of assistance on a similar level as in traditional finance.
The increased institutionalization is additionally a consequence of the incrrase in regulation. The once totally unregulated crypto space is increasingly getting regulated with about each locale comprehensively making new laws in regards to crypto.
This makes Bitcoin more appealing for companies to put resources into as regulations expands investor's security and makes users subject under the law.
3. It is as yet modest to purchase Bitcoin
Contrasted with fiat and gold, Bitcoin is an extremely young asset. It just exists somewhat more than 10 years which is nothing contrasted with gold that is being utilized since 700 B.C. All things considered, Bitcoin had a momentous history. Regardless of being opensource no programmer figured out how to hack the Bitcoin blockchain and take any coins. The number of nodes rose to 100,000 and its worth went from $0 in 2009 to presently 11,700 out of 2020.
While its instability is regularly criticized, Bitcoins yearly lows increases consistently. Contrasted with gold it has additionally the advantage that it is digital.
As earlier mentioned in the first reason, Bitcoin's fundamental incentive is its digital scarcity. The price of an asset to a large extent is dictated by demand and supply.
In conclusion, we have seen that Bitcoin by its structure and history was made for times of crisis such as the current one we are facing as its hard cap is a hedge against hyper inflation and unlimited fiat printing. The space has become and will much more become regulated and institutional which will make access to bitcoin simpler than before for organizations.
Finally, Bitcoin's demand is probably going to increase which makes it a wise investment choice. I am certain that not so much as in twelve months the quantity of organizations that put money into Bitcoin will be significantly higher.
