Big companies have started investing in bitcoin as a safe asset - page 3.

Wexnident

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Quote from: fiulpro on September 17, 2020, 02:58:02 PM

But when it comes to a safe asset part , there is literally a lot of problems that one has to take into account.

- Volatility is here to stay

It always has been, but it has shown pretty positive growth, for the past year, plus, it isn't like the banks are actually in a good situation right now, so it's probably a better risk for them to actually invest in Bitcoin instead of letting it sit as a fiat. Besides, if this investment of theirs were to show growth, that's a big thing for them, but the same could be said vice versa.

Also it seems like they also did invest in the past? https://bitcointalksearch.org/topic/microstrategy-company-adopts-bitcoin-as-primary-treasury-reserve-asset-5268180 Looked around since the name MicroStrategy was quite familiar with me. So is it this, plus the amount said in the article OP said, or is the one from the OPs article a total of the Bitcoin they bought? Since if it was added, then it'd obviously exceed their cash reserves of $500m but if it was total, then it seems to add up properly.

milewilda

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Quote from: Daniel91 on September 17, 2020, 02:37:47 PM

What do you think?

Have they gone through some serious analysis and having these kind of finalization in towards into their decisions? Are they aware that those $400M+ of theirs would really be on negative or not?
Bitcoin is good but wont really be considered on the good side when it comes to safe asset.We know the market is too volatile and for now they cant tell about it since the market had been moving sideways
but when the price plummets down on at least on 7-8k range then that where regrets and blaming time would occur.They shouldnt have make this as an option even though im a pro bitcoiner but
on traditional business specially on the cash reserves talks then putting it on crypto is really a very very risky thing since everything can turn out to zero.

Sadlife

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They must be the entity that's buying Bitcoin, when it was around $10,000. But its certainly a good move to diversify your portfolio, we'll never know what might happen to the stock market, and we've seen Oil fallen down to negative territory. Now is probably a good time to accumulate Bitcoin before a big financial crisis happens. Similarly, other big businesses such as a restaurant in Canada that has thousands of branches, transitioned to BTC also to the fear of an economic collapse.

24Kt

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I believe bitcoin is not to be considered safe asset. You can't tell if one day, you still have the same value as what you invested today. But that's the point in investing in btc, right? We are hoping that in the future it will increase and so our investments will grow big. But of course, the possibility of going down is always there, we just hope it is in the positive direction. But all in all, I don't think btc as a safe asset.

taufik123

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Quote from: TimeTeller on September 17, 2020, 07:11:19 PM

Needless to say, with that huge amount of money involved, for sure they did their risk analysis assessment.
So if they still pushed thru with their investments in bitcoin, it means they have high regards with crypto.
They won't take this big risk if they know they are on the losing end.
And I believe a lot of companies are also privately accumulating their own crypto stash. Who knows, right?

I also believe that a large company like Microstrartegy Inc has already done a risk analysis before deciding to start investing in bitcoin. Companies in their class will not enter bitcoin without prior preparation. This investment has been planned with various bitcoin risks that they must face. Bitcoin can not be said to be a safe asset, because the risk of investing in bitcoin is very high compared to investing in other assets such as bitcoin or crypto. The prices are very volatile and the regulations provided by their government will certainly be tighter.

Bitcoin is a future asset that can be profitable if managed properly and several other large companies have also started investing in bitcoin and started adopting bitcoin as an optional payment platform.

dothebeats

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It would be cool if other investors are also cool with it. This is literally banking on the possibility of bitcoin retaining its value for a long time and not going below a certain threshold and putting a significant value on the line. Normally I would advice against it given bitcoin's volatility and its susceptibility of being dumped on but then again this isn't something I own that I have control with. I just hope the best for their company since this is a high-risk, high-reward move, so they can still cut losses--minimal losses compared to holding on fiat--in the end.

TimeTeller

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Quote from: kawetsriyanto on September 17, 2020, 07:05:37 PM

Making Bitcoin a safe asset is possible, but this is very risky. Moreover, as we know, Bitcoin is very volatile. If indeed this is used for long-term investment, it might become a safe asset, but with various risks.

Have they thought it through? Around the negative and positive impacts of making Bitcoin a safe asset? If this has actually happened, and especially by large and well-known companies, then it is possible that Bitcoin will quickly become a bigger asset again and again.

Needless to say, with that huge amount of money involved, for sure they did their risk analysis assessment.
So if they still pushed thru with their investments in bitcoin, it means they have high regards with crypto.
They won't take this big risk if they know they are on the losing end.
And I believe a lot of companies are also privately accumulating their own crypto stash. Who knows, right?

kawetsriyanto

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Making Bitcoin a safe asset is possible, but this is very risky. Moreover, as we know, Bitcoin is very volatile. If indeed this is used for long-term investment, it might become a safe asset, but with various risks.

Have they thought it through? Around the negative and positive impacts of making Bitcoin a safe asset? If this has actually happened, and especially by large and well-known companies, then it is possible that Bitcoin will quickly become a bigger asset again and again.

Hypnosis00

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This means that they think about a possible huge adoption in the coming years, they'll probably see it. Not in a way that they are accumulating Bitcoin now as for a safe asset but they are doing this because they were able to think that Bitcoin will be the only currency to used (IMO). And that's they prepared while the price is still low because once it fully accepted globally, it is no doubt that the price may increase., doubled, tripled, or even more.

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Quote from: fiulpro on September 17, 2020, 02:58:02 PM

- Volatility is here to stay

Bitcoin is an ever evolving network which is only a couple of years old, while volatility has been a constant factor so far, that can change with time and adoption.
The CEO of microstrategy, Michael Saylor, said in an interview that they plan on holding on to bitcoins for about 100 years; the current network would be markedly different from what we would have in a century. Also, if they plan on holding for that long, intermittent fluctuations in value would not have much of an effect on their decision as long as there is a tendency for growth.
Michael Saylor also specifically talked about the volatility in a podcast interview with Pompilano, his thoughts were shared in a tweet;

Quote from: fiulpro on September 17, 2020, 02:58:02 PM

Invest in Bitcoins, no doubt but to make an investment of millions and that too regarding the company I do think that's a bit of an overstatement.

$425 million was put into Bitcoin by a publicly traded company. There are lots of legal and technical hurdles that would have to be had been passed to make it possible. Getting the executives and directors on board to adopt Bitcoin as a reserve currency would have also been complicated - I would assume all the options, as well as the up and downsides would have been accounted for before they could hit the buy switch.

Expecto

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When you think, using "safe asset" word for Bitcoin could be strange. In the end, Bitcoin is volatile and fiat money isn't. However, fiat money can always be manipulated easily or go down in value while an economic crisis. But there is no such thing that a government etc. can control Bitcoin. In an economic crisis, Bitcoin will be better choice compared to fiat money.

fiulpro

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Bitcoin is amazing - No doubt

But when it comes to a safe asset part , there is literally a lot of problems that one has to take into account.

- Volatility is here to stay
- The government regulations will only tighten with time
- If the government decides to ban bitcoins and other cryptocurrencies then the whole company might be in a bit of a problematic situation
etc..

Invest in Bitcoins, no doubt but to make an investment of millions and that too regarding the company I do think that's a bit of an overstatement.

But even the banks are in a tight spot therefore I do believe that there is no safe investment right now. ~

Daniel91

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Behind is an abbreviated translation of my own post here in the Croatian section of the forum. https://bitcointalksearch.org/topic/velike-kompanije-su-pocele-investirati-u-bitcoin-kao-sigurnu-imovinu-5276508
I believe that the facts presented are of greater importance to the wider bitcoin community, so I decided to transfer my post here (in English).

The owner of one large firm (MicroStrategy Inc), worth more than $1 billion, the so-called "unicorn" decided, driven by inflation and uncertainty around the dollar and fiat currencies, to invest in bitcoins as a "safer investment."
He believes it is not safe for the company's cash reserves, about $500 million to keep in fiat and he has decided to invest that money in bitcoin.
According to the report, he bought a total of 38,250 Bitcoins at a purchase price of $425 million.
So something new has started here, and when this becomes a trend, and other companies also start investing in bitcoin as a "safe asset" I think we will see a sharp rise in the value of bitcoin and a drop in the value of fiat currencies.

You can see the full article here (in Croatian): https://crobitcoin.com/unicorn-kompanije-kupila-bitcoin-za-425m-dolara/?utm_source=email&utm_medium=newsletter&utm_campaign=news

What do you think?

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