- Companies investing in Bitcoin see potential profits in the long-run
- Bitcoin can help in controlling the economic situation
Fidelity, one of the biggest US financial companies has its cryptocurrency subsidiary Fidelity Digital Assets (FDA). It will likely invest in cryptocurrency and is positive to buy bitcoin as part of its asset allocation policy, which is introduced for the New Year. The trend for investing in bitcoin has been picking up fast among many companies. It is because the investors see a lot of potential and growth in the coin in the long-term.
FDA believes that investing in Bitcoin will result in profits to the investors in the long run and improves the economic crisis and pandemic situation.
Following the suit, MicroStrategy, a U.S. listed company, had purchased 20,000 BTC in August 2020, another company Square, a payment service company, Stone Ridge Holding Group, Tudor Investment etc. are some of the other companies who had also invested in BTC.
Another company which has made the headlines is Foresighted, a corporate financial that thought to invest in bitcoin to deal with the pandemic. They are also of the opinion that the investment will also help in stabilizing the economic situation caused by the government’s fiscal and monetary policy.
But to improve the situation currently, the FDA gives reasons that how bitcoin can help in controlling the economic situation. They are:
Potential growth in the long run
Bitcoin may not be the direct investment option for the companies or investors to tackle the economic crisis and pandemic. It is essential to look for an alternative to improve the sailing situation of the companies. This investment is apt during the current crisis. Investing in bitcoin will prove to be beneficial in the long run and it is a diversified investment which will save the company from bankruptcy or loss at a time when the company’s business is not at peak.
Currently, the investment in BTC will be an asset for the company in the long-run as it will give large returns. It will also act as a liquid short-term investment. Thus, it is apt to invest in bitcoin as it will not only contribute to the growth but will also have the potential to maintain the purchasing power of the company. The investment will also help the company to meet its requirements and provide liquidity to the company during low profitability and cash crunch.
Gain with no loose ends
Holding bitcoin as an asset is a profit for any company investing in the coin. Unlike gold, bitcoin has been regarded as the non-interest-bearing asset earlier. The situation has changed off late and bitcoin has become a very potential investment. No doubt, there is a risk in holding bitcoin, but there is potential return in holding it for the long-run, even with no interest.
Unlike in Fiat currency where there is a risk of price inflation, investing in bitcoin is not a risk as this does not affect inflation. It is an asset with very little risk or issues involved. There is a predictable risk in the asset. Bitcoin acts as a means of saving value. Hence, institutional investors and some companies see potential in bitcoin to store value and not to mention the potential benefits that this currency carries.
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