Bitcoin (Cryptography: BTC) It is an asset that large companies are trying to buy and hold. That doesn’t necessarily mean the average investor needs to copy his moves. After all, it makes no sense to buy most of the other assets a company needs to run.
Still, it’s worth digging into this trend a little deeper and seeing if buying more coins is worth following, or if it’s a better idea to stick to previous plans.
Approximately 25% of S&P 500 companies, according to Elliot Chun, a partner at Architect Partners, a cryptocurrency advisory group, by 2030. (snpindex: ^gspc) It holds Bitcoin as a long-term asset on the balance sheet. Starting with the idea that a coin can act as a hedge against Fiat currency inflation, there are several reasons why he hopes that will happen. It is also a convenient way for corporate executives to diversify the Ministry of Finance, which can potentially reduce risk. And if the coin continues to acquire value over time, it prevents those executives from ringing to avoid giving the organization any muscle.
Today, Chun says there are only 90 public companies holding Bitcoin as a financial asset, and they are primarily not part of the S&P 500. If a total of 125 companies (25%) in that set holds coins, that means a large cohort of world leading players will be invested. The way they are invested in it is by buying it, and they (by definition) among the most money-making companies that exist (by definition). Therefore, Chen’s forecasts may unfold and investors may be able to see the profits of the massive new demand for Bitcoin over the next few years.
The question is, is it worth buying a coin? In a nutshell, yes.
Adoption of Bitcoin by corporate actors and financial institutions is accelerating, and as mentioned above, they tend to have more investments than anyone else. That is, if they actually decide to hold Bitcoin on their balance sheet, they will buy a huge amount as a group. If you chase the same amount of coins that more money can buy, the price will rise.
A slightly more complicated puzzle piece is whether a new set of buyers can expect to hold a coin long enough to make the trend itself worth investing in. After all, if a company treats Bitcoin as just another form of cash, and if you want to exchange it for a product or service, that purchase will immediately match the sale of the asset. The main liquidation to fund large capital expenditures can even lower prices. But in this case, that’s not the case.
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