Where Does Institutional Companies’ Interest in Bitcoin Come From?

Although Blockchain technology is associated with crypto coins and ICOs, it is obvious that the world’s largest companies are also trying to use this technology. In particular, the leading cryptocurrency Bitcoin has attracted the attention of many companies in the recent period. Bitcoin, which fell to $ 3800 in the days when the Coronavirus outbreak turned into a pandemic, had negative comments in the markets and leading economists at that time. As we have seen many times before, the authorities have claimed that Bitcoin’s work is done and the leading cryptocurrency will disappear from the market.

When we look at the present day, Bitcoin has once again refuted all such claims. The leading cryptocurrency caught a very serious increase, first going up to $ 12,000-13,000. Later, it broke the all-time record and rose to $ 20,000. This rally in Bitcoin has also increased other altcoins significantly. This means that there has been an increase of more than 5 times from the bottom level during the pandemic.

A more important development than the increases, which has a share in these increases, is that Bitcoin has recently been supported by many companies. According to many authorities, this situation has reflected extremely positively for Bitcoin and crypto money technology.

Many central banks, especially the Fed, preferred to print money to combat the epidemic. Therefore, there was an artificial increase in the markets. However, this policy will have not very good effects in the future. This practice, the results of which we will see with the inflationary policy, has increased the importance of investment instruments such as Bitcoin and Gold.

Institutional and medium-sized companies whose functioning is not related to crypto coins are among the preferred investment tools for new investment searches, for Bitcoin to be accepted as a value protection feature and a long-term investment tool. In the face of changing macroeconomic dynamics in the future, if a large number of large companies decide to add and hold Bitcoin on their balance sheets, developments in Bitcoin supply and price will also be worth watching.

The value of the cryptocurrency market today is around $600 billion. In 2017, this value was around $ 18 billion. This could be an indication that digital and crypto assets are moving closer to the mainstream. The inflationary policies of central banks around the world, such as printing money and lowering interest rates, have led more institutional players to cryptocurrencies. Part of the impressive growth in the crypto asset sector can be attributed to institutional investors moving their money into alternative investments, including Bitcoin and other crypto assets.

New players are also showing interest in joining the crypto space day by day. For example, JP Morgan, which in past years has been known for its anti-Bitcoin stance and even threatened to fire employees who invest in Bitcoin, has changed its stance towards digital assets by announcing plans to invest $20 million in a fundraising round for blockchain consortium Consensys. Similarly, Commerz Ventures, the investment arm of Germany’s Commerzbank, announced its investment in digital asset security startup Curv.

In the last 1 year, many surveys have been conducted regarding institutional investors. If some examples are given; Fidelity Digital Assets conducted a survey from November 2019 to March 2020 to better understand institutional interest and adoption of cryptocurrencies. The report reveals that nearly 80 percent of institutional players in Europe and the U.S. find digital assets attractive. Tom Jessop, CEO of Fidelity Digital Assets, says these results confirm a trend in the market towards a greater interest in digital assets and acceptance as a new investment-grade asset class.

According to another survey commissioned by cryptocurrency insurance company Evertas, it was revealed that institutional investors plan to significantly increase their stake in Bitcoin (BTC) and other digital assets in the future. After a survey of 50 institutional investors collectively managing more than $78 billion in assets in the United States and the United Kingdom, a remarkable result emerged in which 26% of respondents believed that pension funds, insurers, family offices and government wealth funds would increase their stake in cryptocurrency. 64% of respondents believe that the increase in interaction will be moderate. However, the group also expects hedge funds to become more actively involved with crypto. 32% of respondents believe that hedge funds will significantly increase their crypto holdings.

If we examine the companies that invest in Bitcoin and start a trend that will continue for perhaps years; One of the first companies that comes to mind when it comes to the institutional investment company of the Bitcoin and crypto money sector is Grayscale. The company is mainly focusing on Bitcoin. However, in addition to Bitcoin, Grayscale also has mutual funds for some other cryptocurrencies such as Ethereum, Ethereum Classic and Bitcoin Cash. Grayscale’s advertising work titled ‘Drop Gold, Look at Bitcoin’ revealed the advantages of Bitcoin over Gold and was broadcast on many national television channels in America. As such, it is possible to say that the company has a great importance for the crypto money ecosystem. According to the latest data, the company has a total of 598 thousand 237 BTC.

One of the biggest contributions to the wind blowing towards crypto coins came from the MicroStrategy Company. The company, which is listed on Nasdaq, had made large Bitcoin purchases in two separate batches. In total, MicroStrategy has invested $425 million in BTC. With this money, the company has become the owner of about 39 thousand Bitcoins.
Coinshares, which is also a cryptocurrency-focused investment fund, also has a very serious amount of Bitcoin in its hands. It is also known that the Bitcoins held by the company correspond to about 3 thousandths of the total supply. Ryan Radloff, the CEO of Coinshares, states that Bitcoin is a product that should be included in investors’ portfolios.

Despite having the least number of Bitcoins in its hands compared to other companies, Square was the company that attracted the most attention. The company paid $ 50 million and received a total of 4,907 Bitcoins. The company’s CFO Amrita Ahuja mentioned that the future of Bitcoin is very bright.

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