【Financial Investment】Many listed companies buy Bitcoin as asset reserves, can the Bitcoin buying boom last?

Bitcoin goes from “plaything” to asset reserves of controversial listed companies

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Since the beginning of the year, world-renowned listed companies have accelerated the pace of Bitcoin deployment . According to [ Bitcoin Treasuries website ] statistics, currently, more than 9.8 billion US dollars of Bitcoin are held by listed companies, including US software giant MicroStrategy, asset management companies Grayscale and Galaxy Digital, and Jack Dorsey’s mobile payment platform Square.

U.S.-listed companies began to buy Bitcoin as asset reserves, and because they bought Bitcoin, the stock price rose more than the Nasdaq Composite Index! Bitcoin is becoming an important asset allocation target to avoid inflation, and the increase in holdings of listed companies is a representative event.

Since MicroStrategy bought a large amount of bitcoin in September, the number of bitcoin held by listed companies has increased. This trend means that mainstream listed companies are increasingly interested in Bitcoin. While paying attention to or holding Bitcoin, they use it as a store of value and a tool to hedge against inflation .

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Why do these big companies suddenly buy bitcoin in large quantities? How will this “buying tide” affect the Bitcoin market?

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In an uncertain global situation, Bitcoin can be used as a hedging tool. “This investment reflects our belief that Bitcoin, as the most widely used cryptocurrency in the world , is a reliable store of value and an attractive investment asset with long-term appreciation potential than holding cash.”

In a recent interview with Stansberry Research, MicroStrategy co-founder Michael Saylor elaborated on his concerns about the macro economy and his reasons for buying Bitcoin instead of gold :

“In the past decade or so, I didn’t care much about the macro economy, but when interest rates fell from 2% to 0%, everyone started to care about the macro economy. We will encounter the largest economic intervention in the history of the Fed. This has given me a lot I began to study the money supply. I found that the money supply has increased by 7% in the past ten years. The inflation rate is not 2% but 7% to 8%. In a few years, the asset inflation rate will reach 10% or more. Thinking that assets will depreciate by 10% in three years, I imagined a scenario where 1.5 million US dollars were burned or melted, which made me very anxious.”

Bitcoin is obviously a reliable store of value better than cash. Although the price of gold will rise, in 100 years, Bitcoin will still be a hard currency, and the production of gold can be controlled by people. “In the long run, Bitcoin is harder than gold.”

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Mobile payment giant Square: Bitcoin is the native currency of the Internet

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Square is a payment company founded by Twitter CEO Jack Dorsey . Square users (consumers, merchants) use mobile card readers provided by Square to work with smartphones to make payments and collections anywhere.

One month after MicroStrategy announced its investment in Bitcoin, on October 8th, Square, a mobile payment giant with a market capitalization of $86.6 billion, announced that it had purchased 4709 Bitcoins for $50 million (that is, an average of $10,600 per bitcoin). As of the second quarter of 2020, this investment accounted for almost 1% of the company’s total assets.

Square believes that now is the right time to diversify assets and liabilities denominated in dollars and invest in Bitcoin.

In addition, Square’s Chief Financial Officer Amrita Ahuja said, “We think Bitcoin has the potential to become a more common currency in the future”, “As the adoption rate of Bitcoin grows, we intend to learn and participate in a disciplined way. “

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“A global company now includes Bitcoin on its balance sheet. This is a major development. Both the weekly and daily charts will send a huge buy signal.”

Therefore, in addition to the strong “overweight” of Bitcoin by investment institutions such as Grayscale this year, the growth of interest in Bitcoin by listed companies represented by MicroStrategy may also attract more “smart money” into the Bitcoin market. The rise in currency prices is accumulating power.

As for Bitcoin itself, from the “plaything” in the hands of geeks , to controversial investment products , to the hedging tools of investment institutions , to the asset reserves of listed companies , its value has been told by history.

As an investor, you must always pay attention to market fluctuations and trends.It’s time to grasp the pulse of this rapidly changing era, make the right choice at the critical moment, and get faster progress and a better life.

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