If the big companies investing in Bitcoin turns out to be a success, it could have major consequences for the industry.
The increasing adoption of Bitcoin by corporations in recent times suggests that the cryptocurrency’s future is looking bright. The chances of prolonged institutional investment in Bitcoin depends on the returns they would achieve going forward. Hence, it is highly important as to where the companies take position, as Bitcoin (BTC) remains vulnerable. Whether or not large companies buying Bitcoin turns out to be lucrative could have huge implications on the industry as a whole.
In just the last three months, Bitcoin has taken a nosedive in value, going from over $32,000 at the end of May to under $18,000 now. This quick turnaround has caught the attention of some big institutional investors who are monitoring Bitcoin’s movements closely. However, according to Thomas Farley (CEO of a financial services company), it hasn’t been enough to convince these companies to invest in Bitcoin and build up their portfolios quite yet.
In an interview with CNBC on Tuesday, he said that when Bitcoin was around $60,000, many companies got interested. However, as BTC followed a downtrend and reached $17,000, even more businesses stepped in at that time according to the CEO. He added that the decisions were actually easy to take considering the price fall.
When Bitcoin was at $60,000 you had a lot of institutions on the sideline who are looking and saying ‘boy we’d like to invest.’ So as it went to $17,000, it was not a shock to me that you saw some of those institutions step in. That was a pretty easy call.
As of writing, the value of Bitcoin is $23,098. According to CoinMarketCap, this is a 4.40% decrease in the last 24 hours. Last week saw Bitcoin reach a high point of $24,203 before it experienced a market correction; however, short term investors are still taking positions in Bitcoin through futures contracts. The opening of new Futures contracts is impacting the price rise of Bitcoin.