Bitcoin is having a remarkable 2020, with recent heights not seen since the 2017 crypto boom. Only this time, there are more institutions involved, including investment firms, hedge fund managers, and even publicly-listed companies. Here are some of these corporate players that are getting into Bitcoin this year.
Grayscale Investments started reporting their Bitcoin holdings with the U.S. SEC back in January. Back then, they declared $2 billion in BTC assets under management. They now hold 490,000 BTC, currently worth $7.35 billion.
Paul Tudor Jones, a well-known hedge fund manager, said in May that 1% to 2% of his assets are in Bitcoin. His BVI Global Fund manages $22 billion in assets during the time he made this statement.
MicroStrategy, a Nasdaq-listed asset manager, declared holdings of $425 million worth of Bitcoin in September. BTC is now the principal holding in its treasury reserve strategy.
Square, the crypto-friendly payment platform headed by Twitter founder Jack Dorsey, said in October that it has put 1% of its total assets, worth $50 million at the time, in Bitcoin.
Stone Ridge Holdings, which manages $10 billion in funds, revealed in October that it holds $114 million in BTC, also as part of its treasury reserve strategy.
In October, PayPal said that it’s planning to allow customers to buy and sell Bitcoin and other cryptocurrencies.
These are just some of the institutions that publicly declared their Bitcoin holdings and plans. Now the question is, what did they see this time with Bitcoin that they didn’t during its 2017 heights?
Why Are Institutions Buying More Bitcoin?
Here are a few factors that explain the attractiveness of Bitcoin as an asset class to institutions today.
Price history. Bitcoin started the year above $7,000, and in two months it touched the $10,000 level. Then there was a pandemic-fueled fall in global markets, which also affected Bitcoin and drove its price down to near $4,000. What followed was a steady return to pre-crash levels in just two months, followed by stability near the $10,000 level, with sideways action in between, before the rise to $15,000 this past week.
Store of value as compared to gold. Some observers see Bitcoin as a digital version of gold, with similar scarcity properties that make both assets good stores of value. However, Bitcoin beats gold in some traits, such as counterfeit resistance, fungibility, portability, security, and more. Overall, it’s less expensive and more sensible to handle Bitcoin than gold.
Tradeable asset as compared to stocks. Other observers compare Bitcoin’s upside and volatility to the stock market. With lower thresholds to entry and maintenance, as well as a 24/7 market with a growing global user base, Bitcoin and other cryptocurrencies have the potential to offer returns similar to blue-chip stocks, while being more useful from both individual and institutional standpoints.
What Does This Mean for Individual Traders?
But while corporations and hedge funds think in macroeconomic terms, these market shifts are also important for the rest of us who are individual traders or holders. While most of us don’t have the buying power of large institutions, Bitcoin offers a lot of uses for individuals, especially considering that crypto is becoming more useful in daily life. Let us count the ways:
While Bitcoin is recently seen as a store of value for institutions, its use as a means to send and receive money is one of the main strengths that crypto offers to everyone, regardless of your income, work, or education.
It’s not just corporations that can use Bitcoin as an alternative investment. Bitcoin is perhaps the most accessible asset you can acquire and hold, with the lowest barriers to entry among asset classes.
With more companies supporting Bitcoin, there are even more possibilities for using Bitcoin as a form of payment for everyday purchases and expenses, as well as increasingly more channels from which to buy Bitcoin.
Given these trends, there hasn’t been a better time to get into Bitcoin than now, and with Binance, you have multiple options to choose from when it comes to entering into Bitcoin:
You can buy Bitcoin using debit and credit cards just about anywhere in the world, through the Binance website and apps.
You can also use bank deposits in supported regions for buying Bitcoin on Binance. All you need to do is to link your account.
You can also buy Bitcoin through the millions of people holding and trading them on Binance, some of which are accepting local currencies through Binance P2P.
Nowadays, everyone is getting involved in Bitcoin, from individual traders and investors to institutions and Fortune 100 companies. To paraphrase a tree-planting adage, “The best time to buy Bitcoin was 20 months ago. The next-best time is right now.”
