Bitcoin, the world’s largest and most well-known cryptocurrency, has been on a bullish run in recent months. Since the first public company, MicroStrategy, added Bitcoin to its balance sheet, the price of Bitcoin is up 98%. This staggering increase has outperformed all major global assets, making it one of the best-performing investments of the past year for MicroStrategy. For your information, the firm began investing in Bitcoin back in August 2020.
Among other investments, MicroStrategy also invested in S&P 500, Nasdaq, Gold, Silver, Different bonds, Google, Apple, Microsoft, Oracle, IBM, and Meta. Since August 2020, Their Gold and Silver investment is down by more than 5% while the Amazon and Meta investments are down by more than 30%. The decision by MicroStrategy to add Bitcoin to its balance sheet marked a significant shift in the way traditional businesses approach investments. For years, many investors and financial institutions have been wary of investing in the volatile and relatively untested market. However, MicroStrategy’s move signaled that a large, publicly-traded company was willing to take the leap and make a long-term “bet” on Bitcoin’s potential.
Since then, other companies have followed suit, adding Bitcoin to their balance sheets and investing millions of dollars into this digital asset. Some of the other major Bitcoin investors are Tesla and Coinbase, with Elon Musk being a firm supporter of Bitcoin’s long-term potential. This has helped drive up demand and increase the price of Bitcoin, making it one of the hottest investments on the market. In the past 12 months, however, Bitcoin has been underperforming. This did not stop investors to use the market in their favor and profit, nonetheless.
Institutional Investors Remain Skeptical About Bitcoin
Despite the growing interest in Bitcoin, there are still many who remain skeptical of cryptocurrencies. Critics argue that its price is driven purely by speculation and that it is too volatile to be used as a viable investment. Additionally, they point out that the market is largely unregulated, making it a potential target for criminal activities such as money laundering and fraud. While this was the case until recently, governments around the world are pushing toward international regulation of digital assets. The founder of MicroStrategy, Michael Saylor, has been one of the biggest advocates for Bitcoin adoption, leading to the decisions the company took in the past.
The rise of Bitcoin has also attracted the attention of governments and central banks around the world. Some countries, such as China, are exploring the use of their own digital currencies as a way to reduce their dependence on traditional currencies. Just some days ago, a report stated that over 300,000 merchants in China are using the pilot of Digital Yuan, a CBDC issued months ago by the government of China. Others, such as the United States, are examining the potential use of cryptocurrencies in their financial systems.