The Reasons Why Companies Rush On Bitcoin -1

  For months, there has been a constant stream of news about the inclusion of market-leading businesses in cryptocurrencies. Last week, this turned into a flood, helping to push the Bitcoin price to a record $ 48,297. The most notable move came from Tesla (TSLA), which announced Monday that it purchased $ 1.5 billion worth of Bitcoin to keep it on its balance sheet. The company plans to allow consumers to pay for cars with Bitcoin in the long run.

Tesla Is Not Alone!

The oldest bank in the US, BNY Mellon (BK), announced on Thursday that it will hold cryptocurrencies for customers and make them transferable. Roman Regelman, CEO of the Bank's Wealth Services and also Head of the Digital Division, said, "Growing customer demand for digital assets, maturing advanced solutions and improving regulatory openness offers us tremendous opportunities to expand our existing service offerings into this new area." Mastercard (MA) announced on Wednesday that traders will allow payment with cryptocurrencies through the company's integrated network later this year. Payments will be converted into fiat currency before entering the companies' systems. It is no longer a secret that Twitter (TWTR) is also considering a Bitcoin investment. Square (SQ) put the Bitcoin investment on its balance sheet and gave Cash App users access to purchase the cryptocurrency.

Why is this happening now?

Cryptocurrencies are not very useful except in a small number of situations (such as cross-border transactions). Even there, we cannot say that it can hold on properly. There are at least four big reasons for companies to enter this trend!

The first is that some company founders believe in Bitcoin!

Even if Bitcoin is not at the core of companies' operations, thanks to the excitement of the asset, companies are convinced that there should be cryptocurrency investments. This seems to be the case for Tesla CEO Elon Musk and CEO of Microstrategy Michael Saylor. Microstrategy, whose overall market capitalization was less than $ 1 billion earlier last year, currently holds more than $ 2 billion in Bitcoin, and the market value of this asset is now just under $ 10 billion. Saylor said in an interview with Barron last year that he sees Bitcoin as a measure against monetary depreciation and inflation. Square CEO Jack Dorsey's admiration for Bitcoin probably also accelerated Square's integration of the asset. Dan Morehead, founder of the crypto venture fund Pantera Capital, stated that Tesla's acquisition of Bitcoin is a strong marketing for the company and its currency, but it will probably not change the way Bitcoin is used, "Tesla sells half a million cars a year. I would be surprised if they sell 4 percent of them with Bitcoin." Morehead thinks Bitcoin's growing use for cross-border payments is much more exciting from a practical standpoint. Other companies are starting to adopt Bitcoin due to customer demand. This seems to be the case for BNY Mellon, who never made risky bets on new technologies. More and more institutional investors are buying Bitcoin, which means they will need somewhere to preserve it. BNY Mellon's move may have been made entirely to stay out of the industry. Bitcoin infrastructure has grown closer to the systems used in the rest of the financial world. Big companies now procure cryptocurrencies. - As in the case of JPMorgan Chase (JPM) - they provide services to cryptocurrency businesses, even if most of them don't keep Bitcoin on their balance sheets.   The Reasons Why Companies Rush On Bitcoin -1

Source: https://www.barrons.com/

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