-What is Bitcoin?
-Why do Investors invest in Bitcoin?
-Top 5 institutions to invest in Bitcoin
While there is a lot of negative commotion around cryptocurrency, it is an undeniable fact that a lot of people see the future it holds. Although it is still an unregulated asset in most parts of the world, investors and crypto enthusiasts are not shying away from investing in these digital assets.
Although a few big names such as Warren Buffet have called cryptocurrency a fad and associated it with a bubble that will soon burst. It seems that no one wants to be left alone on the crypto bandwagon. The Fear of missing out (FOMO) is real. Be it big influencers or institutions, cryptocurrency has roped everyone in.
Before we discuss the top 5 institutions that hold Bitcoin, let’s understand the basics of Bitcoin and why is it valuable enough for these top institutions to invest in Bitcoin.
Bitcoin: First cryptocurrency in the market
Bitcoin, abbreviated as BTC, is one of the digital money, or as we call it the first cryptocurrency that works without the involvement of any governmental organization or bank. It was created in the year 2009 by a mysterious man who goes by the pseudonym of Satoshi Nakamoto. The identity of the creator of bitcoin is still a mystery to the entire world. One of the most unusual aspects of this coin is that it works on a decentralized system. Unlike traditional assets, it is not controlled by any institution or government.
Bitcoin(BTC) is a cryptocurrency with no physical coins that one can touch. The record of these coins is maintained on a public ledger that is transparent for everyone to access. The bitcoin transactions undergo verification by the massive amount of computing power. Bitcoin is very popular around the globe despite not being on the legal tender. The influence of this cryptocurrency led to the launch of many other digital tokens or cryptocurrencies, generally known as altcoins.
Why Investors Invest in Bitcoin?
Bitcoin provides its users with an efficient means of transferring money across the internet. It is a completely decentralized network that has a transparent set of rules, therefore presenting a permissionless alternative to centralized systems.
The key attributes that make Bitcoin (BTC) a successful crypto coin are:
Scarcity: During its launch in 2009, it was stipulated by the developer of this protocol that the supply of this crypto token would be capped at 21 million. The current supply of BTC is nearly 18 million. It is expected that the supply shall reach 19 million by 2022.
Divisibility: The supply of bitcoin is way smaller than the fiat currencies however, this cryptocurrency is divisible to 8 decimal points. The smallest unit of this crypto is called a satoshi, after its developer. This divisibility has led to the distribution of quadrillions of satoshi among the entire global community.
Utility: The biggest selling point of bitcoin is the utility of blockchain technology. The flexibility of blockchain technology gives bitcoin the power to be used outside the cryptocurrency space.
Transportability: The cryptocurrency wallets, exchanges, and other tools have made transferring bitcoin between parties easier and within minutes irrespective of the size of the transaction at very low costs.
Durability: Durability is one of the major issues in the case of fiat currencies. However, bitcoin is tremendously valuable in such a case. BTC cannot be destroyed like its fiat counterparts.
Counterfeitability: It is extremely difficult to counterfeit bitcoin. Why? All thanks to its complex blockchain system which is too complicated to be counterfeited.
Also, read about the Top 20 Institutional investments done in crypto.
Top 5 Institutions to Hold Bitcoin
|Voyager Digital Ltd.|
|Galaxy Digital Holdings|
When we talk about cryptocurrency and Bitcoin, we can never miss out on mentioning Tesla. The Electric vehicle manufacturer Tesla has joined the ranks of the top institutions holding Bitcoin. The SEC filing shows that the company made an investment of $1.50 Billion in cryptocurrency. It sold around 10% of the Bitcoin holdings in Q1 2021.
Tesla’s 42,902 BTC was worth $ 2.8 Billion at the time of writing. According to its SEC filing, Tesla’s Bitcoin purchase reflects an updated investment policy aimed at diversifying its cash on hand and maximizing returns.
However, Musk’s relationship with Bitcoin isn’t completely positive. After announcing that Tesla would accept payments in Bitcoin for its products and services in March 2021, just two months later the CEO abruptly announced that the company would no longer accept the cryptocurrency for payments. This was done on the pretext of the increased usage of fossil fuels to mine and transact Bitcoin.
A leading business analytics platform, Microstrategy also has its hands dipped in Bitcoin. The firm continued its Bitcoin buying spree through the financial year of 2021. The owner of the company, Michael Saylorpersonally owns 17,732 BTC and is one of the top 100 Bitcoin owners.
Microstrategy even hosted Bitcoin for Corporation in February 2021, to educate corporations on Bitcoin investments and to speed the holding of crypto assets. The conferences ended with Saylor remarking to see numerous companies converting their balance sheets into Bitcoin in the upcoming years.
Square Inc invested $50 million in Bitcoin in October 2020. This lit the fuse for institutional investment in cryptocurrency. Since then, there was no looking back for Square Inc. It has been aggressively investing in Bitcoin. It was not at all surprising to see CEO Jack Dorsey advocating Bitcoin on his social media handle.
With its holdings now amounting to 8,207 BTC worth $488 million at the time of writing. Square hasn’t changed its tune on Bitcoin. In March 2021, Square CFO Amrita Ahuja argued that every balance sheet might be translated to Bitcoin super soon.
In May 2021, the company reaffirmed its commitment to its Bitcoin buying strategy, following an interview in which Ahuja had said the company had no plans to make further Bitcoin purchases. Square has also made further efforts to build out the Bitcoin ecosystem, launching a $5 million fund to further crypto education and leaping to Bitcoin’s defense with a white paper defending the cryptocurrency’s environmental impact.
Also, read about the top 5 influencers who hold Ethereum.
Voyager Digital Ltd.
Crypto brokerage Voyager Digital holds 12,260 BTC according to bitcointreasuries.org, worth around $723 million at the time of writing. The firm aims to provide a one-stop-shop for trading digital assets, and in May 2021 reported quarterly revenue of $60.4 million, up 16x from the previous quarter.
Also, read about the top 5 institutions holding Ethereum.
Galaxy Digital Holdings
The largest institutional holder of Bitcoin to be directly involved with the crypto industry, crypto-focused merchant bank Galaxy Digital Holdings holds 16,400 BTC which is worth $967 million at the time of writing.
Founded by Michael Novogratz in January 2018, the company has partnered with crypto firms including Block.one and BlockFi. Novogratz is, unsurprisingly, a keen advocate for Bitcoin. However, he still advocates people to hold Gold way more than Bitcoin given its volatility.
Also, read about the top 5 influencers bullish on Bitcoin.
Summing it Up!
The Bitcoin bandwagon has been ridden by every other top institutional firm. While a few sold a part of their assets, most of them are still holding their Bitcoins. These Bitcoin sharks are primarily the ones who control the sentiment around Bitcoin, given Musk’s one tweet led to a fall in the prices of the cryptocurrency. That was all we had to tell you about the top institutions holding Bitcoin.
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