Why do companies buy Bitcoin?

Recently it has been noted that the Bitcoin cryptocurrency asset has gained recognition. Recently the rising demand for cryptocurrency has seen the price of cryptocurrency continue to climb.

Over time, Bitcoin experienced significant development. As a result, Bitcoin transformed from an asset questioned by many to a promising investment. Ideal for well-known investors, big companies, as well as retail investors.

In February of last year, Tesla Inc bought Bitcoin worth 1.5 billion US dollars. Alongside Tesla earlier, Microstrategy Inc., a US business Microstrategy Inc. in 2020, has acquired Bitcoin in the amount of 55,226 BTC, which is worth 600 million US dollars.

The question is, why do such large firms as Tesla Inc and Microstrategy Inc. seem to be so positive regarding Bitcoin?

The reasons Tesla & Microstrategy Inc. Chose Bitcoin.

According to Tempo, Elon Musk explained that the idea of storing the assets you have in Bitcoin is more secure than when you have conventional money or cash. Additionally, Elon also plans to accept payments for the purchase of his Tesla electric car using Bitcoin. This is why businesses invest in Bitcoin.

The reason for this was to allow consumers greater flexibility in securing a variety of payments while maximizing the cash value. Furthermore, this decision will make Tesla the only electric vehicle company to officially accept crypto-based assets as payment.

In the meantime, Microstrategy Inc. experienced an increase in its stock price of 600 percent between August 2020 and February 2021, following the purchase of Bitcoin. Since purchasing BTC, the value of the assets owned by Microstrategy has risen dramatically. This is why Microstrategy’s company Microstrategy plans to purchase more Bitcoins.

Tesla and Microstrategy are not the only two around the world. In addition to these two major firms, many other companies earn huge profits when they buy Bitcoin. They include Square Inc., Tudor Investment Corp., and many more. This is sure to cause an increase in the price of Bitcoin as well as public confidence.

In addition to the profit and reliability of big companies, Forbes mentions that several reasons can cause companies to drop their faith in Bitcoin. Anything? Read the review below.

Bitcoin as a Safe Haven Asset

In the face of uncertain economic conditions from 2020-2021, numerous market people think that Bitcoin is among the assets that are considered to be safe as gold. This is because the safe-haven asset has been long believed to possess the ability to keep their heads above water in a volatile economic environment.

It is not just the case that any asset can be considered a “haven. Certain requirements are required for a commodity to meet in order to qualify as an asset that is a haven.

One of the reasons is that the product must demonstrate it will stay solid in the middle recession. The world economy is in a downturn. However, over the past 10-years, Bitcoin has repeatedly proven to be among the most reliable assets for safe-havens. It is due to the fact that its value is rising in spite of global challenges, including that of the pandemic COVID-19.

In addition, the majority of people are beginning to develop an unease with the currency of the state. Inflation is certainly among the main reasons. This is why a lot of investors have begun buying Bitcoin to prevent depreciating the value of the asset.

What do you think of gold? This is a great asset that can be made into a simple and inflation-free investment. However, to store gold is a requirement for a particular area that has a high degree of security. In comparison with gold, Bitcoin can be considered to be much more reliable as you do not require a storage facility that is exclusive.

Bitcoin as a safe haven, businesses can enjoy an increase in profits on assets that are protected from the effects of global economic issues. Prior to the halving trend in May 2020, the value of Bitcoin was quite high and even over 30 percent within just a few weeks.

Bitcoin Supply and Demand Levels

Bitcoin is a scarce resource of 21 million BTC. This means that Bitcoin is subject to a halving or halving the standard amount of rewards that are generated every 4 years. This is to ensure Bitcoin’s inflation rate while also preserving the supply of Bitcoin.

The most recent halving was in the year 2020. Since the halving, Bitcoin has seen a rise in value. The price increase is due to reduced mining rewards as well as rewards becoming more difficult to obtain.

Many economic experts believe that the price of Bitcoin will be soaring in the coming years. This is because the amount needed is higher than the amount available.

Huge Potential Returns from The Bitcoin

The purpose behind investing is, naturally, to try to gain gains from existing assets or funds. This is why Bitcoin provides the chance to earn huge amounts of money. This is among the main reasons that businesses or investors purchase Bitcoin.

Although Bitcoin is still relatively old, it is still a relatively new investment. However, the rewards that it can provide are significantly higher than other kinds of investments. Even when crypto-assets are not stable, however, the potential for huge returns is still able and is likely to happen.

Bitcoin Accessibility

It is possible to invest in bonds, stocks, mutual funds, properties, land, as well as other types of assets that can be difficult for certain individuals. There are a lot of documents to research and create. In the case of investment instruments in real estate, it is essential to learn how to draft an agreement with an attorney to handle contracts and agreements.

Based on these aspects and motives, it’s not a surprise that numerous companies buy bitcoin and big investors decide to invest their money in bitcoin. The amount of investment is not a static amount. It can be several hundred million.

Read More: What is Yield Farming? What is the Way it Works on DeFi?

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