PayPal, Microstrategy, Square and more - the companies that are influencing the digital currency market, and why now.
The corona plague that has plagued us for the past six months and the macroeconomic events that followed have slowly begun to cause buds to change existing economic perceptions. Doubts about so-called "safe assets" and the desire not to "keep all the eggs in one basket" and actually diversify the composition of existing assets or investments, would hasten for a number of prominent institutional investors and many companies to enter the crypto market or increase its involvement.
Earlier this year, Fidelity, one of the world's largest CFOs, published a comprehensive report examining the thesis of investing in bitcoin, referring to it as an "insurance policy against government and central bank policies." It was found that out of 800 institutions surveyed across the US and Europe, almost 80% of investors find interest in digital assets. Moreover, 60% of investors claim that there is room in investment portfolios today for digital assets, whether bitcoin or other digital currencies.
Influential companies are adopting Bitcoin
As it became known that the founders and senior employees of Stone Ridge Property Management purchased Bitcoin on a significant scale independently several years ago, its clients also began to rethink the composition of their portfolios and expressed growing interest in investing in the currency. The company recently confirmed that under its management it has accumulated about 10,000 Bitcoin coins valued at about $ 115 million, and it seems that the recent period has only accelerated the company's involvement in the market.
One of the most prominent companies to enter the field and by and large, is the American business intelligence giant Microstrategy, which in the last two months has acquired a cumulative amount of about 38,250 bitcoin coins worth $ 425 million in order to hedge against Fiat inflation. This move has positioned Bitcoin as the company's dominant reserve asset and made it the largest digital currency holder among companies traded on US stock exchanges. Large global companies now appear to be following the company's Bitcoin strategy.
Not long after that, the payments company Square, led by Jack Dorsey of Twitter, placed one percent of its assets in Bitcoin (as of the end of the second quarter of 2020) when it purchased 4,709 Bitcoin coins worth $ 50 million. The company said that "we believe that Bitcoin has the potential to be a more common currency in the future, and as the adoption of Bitcoin grows, we intend to continue to learn and take part." This is not the company's first touch in the field - in 2018 Square expanded its mobile payment service to support bitcoin trading and in 2019 launched Square Crypto, which provides grants to Bitcoin developers and designers.
Last week, payments giant PayPal dropped a bombshell when it announced it would allow its customers to buy, sell and make payments in digital currencies. In the first phase, the service will be available to its customers in the US, but by the beginning of 2021, PayPal is expected to expand the service outside these borders and actually allow more than 26 million businesses operating through it to receive Bitcoin, just as they receive other foreign currencies.
Why now?
Bitcoin started 2020 when it traded at $ 7,300. The corona plague, which has hit all markets in one way or another, has not missed the digital currency market either. But in recent months he too has managed to recover and a strong sense of anticipation for a breakthrough at the GATE has been felt lately.
The scope of uses of Bitcoin and other digital currencies, as well as the scope of trading cycles, are growing as a result of or alongside the unique global financial situation in which we find ourselves. Events that are characterized by instability, especially when it comes to global events, create an opportunity in the world of digital currencies and the growth potential is significant. In the last month, Bitcoin has strengthened significantly and is currently trading at $ 13,000, the highest value for this year.
It seems that the entry of dominant companies like Stone Ridge, Square, Microstrategy, and of course PayPal into the digital currency market has tremendous significance. They are powerful, well-known and influential, and once they choose to own Bitcoin - the whole look at it changes as well. They strengthen his legitimacy, encourage his adoption and usability and increase his awareness of and trust in him among the average person. Recent trends may suggest the beginning of the adoption of a new and decentralized economic conception.
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