Expert of the Currency.com cryptoexchange Maxim Varenikov in the author's column topplabs.org on how large companies invest in bitcoins and what prospects they see in this asset
Cryptocurrencies remain a highly profitable asset despite wariness and hostility from regulators in some countries. At the same time, as the adaptation of cryptocurrencies to the conditions of the functioning of the classical financial system, interest in them grows.
In addition, even despite the high volatility of cryptocurrencies as an instrument in the short term, in the medium and even more so in the long term, cryptocurrencies demonstrate a stable positive trend, which is clearly visible on the weekly chart.
At the same time, if you look in the medium term, cryptocurrencies turned out to be more interesting than metals, which serve as a safe haven in times of turbulence, and the S&P 500 or Nasdaq indices, which show significant growth during an economic recovery.
Moreover, the economic collapse associated with the Covid-19 pandemic in 2020 has helped strengthen cryptocurrencies as an investment vehicle. This became a possible basis for an explosive growth in the price of cryptocurrencies in 2021.
Thus, the cost of bitcoin over the year increased from slightly more than $ 10 thousand per unit to almost $ 50 thousand, having climbed in the spring of 2020 into an area above $ 60 thousand. May 2021, a psychologically important mark of $ 4 thousand. The cost of Ripple (XRP) increased over the year from $ 0.25 to more than $ 1, exceeding the $ 1.8 mark per unit in April 2021.
In addition, powerful leaders appeared on the market during this period, who took places in the top ten cryptocurrencies in terms of capitalization – Cardano, Solana, Polkadot, Dogecoin.
Global players invest in cryptocurrencies
The introduction of cryptocurrencies in the world is non-linear. The first swallow in the legalization of bitcoin as a means of payment was El Salvador. Next, the first cryptocurrency can be legalized in another Latin American country – Brazil. At the same time, China is putting tough pressure on cryptocurrencies, Turkey is opposed to cryptocurrencies, and the United States is gathering a consortium of 30 countries to also put pressure on the sector.
The corporate sector, meanwhile, is responding with hope to cryptocurrency investment opportunities. At the moment, it is known that companies such as Tesla, MicroStrategy, The Motley Fool, Square, ARK Invest, Meitu, Nexon and others have invested in cryptocurrencies. Many of them stated that they see the growth potential of cryptocurrencies, which is why they are investing in them. At the same time, when the period of publication of quarterly reports coincides with a downturn in the cryptocurrency market, companies have to report losses.
In particular, the Hong Kong company Meitu in its public report for 6 months of 2021 announced a loss of $ 2.6 million due to the revaluation of the cryptocurrency associated with a fall in its value. At the same time, the company is positive about the prospects for cryptocurrencies as an asset class.
“The blockchain industry is still in its early stages of development, and cryptocurrencies have significant growth potential,” the report says.
In mid-September, additional bitcoins worth $ 250 million were acquired by MicroStrategy. Its CEO, Michael Sailor, believes that the Bitcoin market will surpass $ 11 trillion versus $ 1 trillion now and surpass the gold market in volume.
“When it reaches $ 10 trillion, its volatility will drop sharply. When it moves towards $ 100 trillion, you will see the growth rate fall, volatility will decrease, and it will have a stabilizing effect on the entire financial system of the 21st century, ”said Michael Sailor.
Japanese game developer Nexon, which bought bitcoins in May at an average price of just over $ 58,000, spent less than 2% of the total on the purchase. At the same time, the president and CEO of the company, Owen Mahoney, believes that bitcoin will retain its value, even if it does not become widespread.
“In the current economic climate, we believe that bitcoin offers long-term stability and liquidity while maintaining the value of our cash for future investments,” says Mahoney.
Investments for the corporate sector
The activity of large world players and the high growth potential of cryptocurrencies make them attractive to the corporate sector in the post-Soviet space. At the same time, analysts of the first legal cryptocurrency cryptocurrency exchange in the CIS, Сurrency.com , note that cryptocurrencies can be considered as an option for portfolio diversification and investments in financial markets in order to mitigate risks. If companies are afraid to invest in highly volatile markets, the cryptocurrency market may offer them stablecoins, the rate of which is pegged to fiat currencies.
If you look at the experience of large companies, they see cryptocurrencies as a defensive asset that will allow them to protect themselves from the influence of inflation. Most companies do not speculate in cryptocurrencies, but still consider them as a market for investment. However, it can be considered depending on the investment strategy of the company as long-term, medium-term or short-term.
According to Currency.com analysts, now there are no obvious and objective difficulties in operating with cryptocurrencies for legal entities. For example, company representatives on a crypto platform can use the same option as individuals. At the same time, they have certain advantages, for example, in the form of first line customer support.
Today, about 30 cryptocurrencies are represented on the Currency.com crypto platform. In addition, corporate clients have the opportunity to invest in tokenized assets that are tied to the value of the underlying assets and have an equal value to them at any time, which means, first of all, the possibility of receiving a similar income from the adjustment for dividends on tokenized shares in comparison with receiving a dividend income from real stocks. At the same time, investments take place within one platform.
To start investing, all you have to do is contact the corporate client department.