Not everyone sees a benefit in companies’ interest in bitcoin
Some investors are using the cryptocurrency hype
The example of corporations that bought BTC may be followed by other market participants
International consortium of news organizations developing transparency standards.
Against the background of the purchase of bitcoins (BTC) by American companies Square and MicroStrategy, members of the crypto community decided to discuss the interest of large organizations in investing in cryptocurrency. During the discussions, it turned out that other institutional market participants are also actively investing in digital assets. At the same time, the share of many significantly exceeds the investment volumes of Square and MicroStrategy.
Institutionals entered the cryptocurrency market?
To visualize the interest of companies in BTC, Coin98 analysts have compiled a list of major coin investors for 2019-2020. It turns out that Square and MicroStrategy are far from the only public companies to openly invest in bitcoin..
According to Coin98, Grayscale is the largest cryptocurrency investor among the designated segment of organizations. The total volume of bitcoins purchased by the company’s name to 449,586 coins (over $ 5 billion, at the current exchange rate). In second place, with a result of 69,730 BTC (about $ 785 million, at the current exchange rate), was CoinShares. MicroStrategy, with 38,250 bitcoins (about $ 434 million at current exchange rates), only came in third.
Not only @Square, in 2020 there are more than 10 Public Companies investing in $ BTC, with a total value of over $ 6 billion, equivalent to nearly 600,000 BTC. $ BTC #BTC pic.twitter.com/7zxX94Clwx
– Coin98 Analytics (@ Coin98Analytics) October 13, 2020
This Is Why I Have So Much NANO In My Portfolio
There are other public BTC investing companies not mentioned by Coin98.
List of public companies investing in bitcoin. Data: bitcointreasuries.org
The popular analyst Lark Davis, in turn, drew attention to what prospects the interest of institutions opens for the digital asset market. Among other things, he was interested in advice on portfolio compilation from large investment companies. For example, the Fidelity team, he noted, advises keeping 5% in bitcoin. In total, the company manages assets with a total value of $ 3.3 trillion.
If all Fidelity clients heed the advice of their investment managers, Lark Davis noted, the organization will gain control over 75% of the digital asset’s capitalization. According to the analyst, the potential for such a scenario is a reason to establish good relations with the company..
Fidelity has 3.3 trillion in assets under management, if as they recommend this were to be 5% #bitcoin then Fidelity would have 165 billion in $ btc which is 75% of the current market cap.
What does this mean?
Number go up friends.
– Lark Davis (@TheCryptoLark) October 14, 2020
Not everything is so smooth
Some companies buy bitcoin to protect themselves from inflation, while others – for the purpose of speculative earnings. Another theory indicates that many organizations are using investments in BTC to increase their market share. CryptoWhale blogger popular in the crypto community believes that news about cryptocurrency purchases by popular companies can be misleading.
As an example, he cited the Fidelity position. Many market participants believe that it is the company that is the owner of the cryptocurrencies that it controls. CryptoWhale claims this is not the case. According to him, only the clients of the organization buy digital assets. Accordingly, the statement that Fidelity owns a large share of coins, according to the blogger, is incorrect..
“Grayscale is a client portfolio management service. They just trade on behalf of their clients and then charge insanely high fees, ”writes CryptoWhale.
Other companies, he believes, may pursue selfish goals. For example, the blogger called the purchase of Bitcoins by MicroStrategy an attempt to get profit through creating a hype around the company..
“MicroStrategy’s revenues have been falling for almost ten years. Mainly due to a decrease in demand for their services. The company’s recent investment of $ 425 million in Bitcoin is nothing more than a way to provoke the publication of high-profile headlines and generate more hype around the falling prices of their shares, ”says CryptoWhale.
MicroStrategy Stock Movement
The blogger also questioned Square’s investment in cryptocurrency. He believes that the decision of the company’s representatives to buy bitcoins is a simple advertising move..
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