Investing In Bitcoin: A Fence-Sitter's Guide

Bitcoin is trading at record levels since December 2020. Investors around the world are placing stakes on this digital currency to hedge against inflation, as central banks continue issuing fiat currency to help the economy.

Today Bitcoin is a truly digital equivalent of gold. But if the gold rates increased by 22% during the last year, the price of Bitcoin increased by 144%! Moreover, on January 8, 2021, the most famous digital cryptocurrency has reached its new all-time-high level of $41,941.56.

Large Investors In Bitcoin

The world’s leading media are reporting a record investing inflow from huge institutional companies in Bitcoin. Let’s’ take a look at the companies that have already invested in digital gold.

Square, Inc.

Last year American financial services company founded by Jack Dorsey (CEO of Twitter Inc.) has invested $50,000,000 in Bitcoin. The company‘s investment division emphasized that they consider cryptocurrency as a tool for expanding economic opportunities.

“We believe that Bitcoin has the potential to be a more ubiquitous currency in the future. As it grows in adoption, we intend to learn and participate in a disciplined way. For a company that is building products based on a more inclusive future, this investment is a step on that journey.” – Amrita Ahuja, Square’s Chief Financial Officer

Nowadays Square, Inc. owns 4,709 BTC, which is the equivalent of over 0.025 percent of Bitcoin’s total circulating supply.

SkyBridge Capital

This investment company is led by the famous American financier and the former White House director of Communications – Anthony Scaramucci. In January 2021, SkyBridge Capital launched a new Bitcoin fund and revealed that the company has already invested in BTC about  $310,000,000.

“We believe Bitcoin is in its early innings as an exciting new asset class. With the institutional quality custody solutions available today, we believe the time is right to allocate capital and provide our clients access to the digital assets space. ” – Anthony Scaramucci

Ruffer Investment Company

In November 2020, British fund firm Ruffer allocated  2.5% of its assets under management to  Bitcoin. The total investments exceeded $744,000,000. So today Ruffer holds about 45,000 BTC. The company’s said that this investment was primarily a protective move against risks in a fragile monetary system and financial markets. 

“Negative interest rates, extreme monetary policy, ballooning public debt, dissatisfaction with governments – all provide powerful tailwinds for bitcoin at a time when conventional safe-haven assets, particularly government bonds, are perilously expensive.”

MicroStrategy

Analytical giant MicroStrategy was one of the first public companies that invested in Bitcoin. At the beginning of August 2020, the company acquired about 21,454 BTC. Later the head of the company, Michael Sailor, said that investing in Bitcoin is part of a new strategy designed to maximize long-term value for the company’s investors.

“#Bitcoin is emerging in 2021 as the new, compelling institutional-grade safe-haven asset. Excess cash is a drag on shareholder value in the current monetary environment, so we can expect more firms to adopt Bitcoin as a treasury reserve asset.” – Michael Sailor

Today MicroStrategy owns 70,784 BTC.

Grayscale Investments

This investment company is the largest institutional holder of BTC. The firm’s flagship product is the Grayscale Bitcoin Trust (GBTC), which allows accredited investors to make money on Bitcoin without actually owning it.  In total, Grayscale Investments holds 616,000 BTC which is more than 2% of the Bitcoin total circulation supply.

Moreover, the company is also actively investing in other cryptocurrencies like ETH, LTC, Bitcoin Cash, Zcash, and XRP. 

Should I Invest In Bitcoin?

Analytics thinks that in 2021, we may see a longer list of organizations investing in digital assets which will defiantly make a huge impact on the crypto industry. There are some trends that can already be observed like reduced volatility of the crypto market, Bitcoin’s price increase, and mass adoption of cryptocurrencies.

Is Bitcoin A Good Investment?

What are your thoughts on the institutional investors? Do you agree that they will help crypto to go mainstream? Share your thoughts in the comments below.

The views and opinions expressed here are solely those of the author. Every investment and trading move involves risk. You should conduct your own research when making a decision.

Previously published at https://stealthex.io/blog/2021/01/26/is-bitcoin-a-good-investment/