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Three Leading Companies Invested Millions in Bitcoin This Year, Here Is Why
Bitcoin experienced one of its most volatile years, dropping to $3,800 in March and rising to its old highs of $18,000 only eight months later, prices which we have not seen in years. Consequently, the price action attracted a variety of important figures and successful companies who have invested in the swiftly growing digital asset.
These new investors include some of the most widely spread companies in the world such as MicroStrategy, Square, and Grayscale. With dozens of millions in Bitcoin investments, these entities have publicly shared their faith in the project by purchasing the asset even at prices regarded as strong resistance levels in the market.
But why have people suddenly recognized Bitcoin’s value and decided to invest at a time of great economic and political uncertainty? After all, we saw Bitcoin being referred to as a foolish investment for years and years by several financial experts. Have they been the foolish ones after all?
To delve deeper into this interest, we will analyze each recently made investment to discover why Bitcoin is such a hot commodity for them. We will begin by showcasing the story of MicroStrategy CEO Michael Saylor, the man who started 2020’s Bitcoin shopping spree.
MicroStrategy $425M Investment
Michael Saylor, CEO of Nasdaq-listed MicroStrategy, shocked the world of Crypto Twitter in September by announcing that his company acquired an additional 16,769 Bitcoin for a total price of $175 million. Thus, MicroStrategy owned 38,250 Bitcoin in total at an aggregate purchase price of $425 million.
The investment choice surprised many, as MicroStrategy was neither an investment fund nor a VC angel company. Instead, the firm was simply a business intelligence company that decided to adopt Bitcoin as its primary reserve asset.
At the time, Bitcoin was trading between $10,000 and $11,000, recently falling from a high of $12,000. Due to that reason, many within the community were unsure if Saylor made the right decision as the leading cryptocurrency was approaching a level that was not successfully broken since 2017. Bitcoin failed to hold $13,000 in 2019 at a time of no political or economic crises, leading many to think that the digital asset will once again collapse. However, this was not the case.
In an interview with Real Vision CEO Raoul Pal, Saylor explained his position by stating that the investment is not a speculation nor a hedge. For him, investing in Bitcoin was a deliberate corporate strategy to adopt the ‘Bitcoin Standard,’ adding that it is a million times better than gold. We note that MicroStrategy decided to restructure its treasury as a reaction to growing economic uncertainty, searching for an asset that can provide a long-term store of value.
Could it be that Bitcoin is really that bullish that a major company decided to invest almost half a billion dollars? According to several statements shared by Michael Saylor, the financial decision resembles more of a hedge than an actual investment but remains to be both at the same time.
Comparing it to other assets, Saylor delved deeper into the potential future price action of gold. The CEO believes that once gold reaches $50,000 an ounce, hundreds of billions of dollars will be spent on upgrading gold mining which will triple the production of gold. “The price of gold is going to get driven into the dirt.” Likewise, he explained the historical background of oil in an interview, reminding viewers that the price of oil collapsed once the amount of daily produced barrels surged.
For Saylor, Bitcoin is the only viable investment option as the cryptocurrency asset features a fixed total supply that cannot produce more than 21 million coins. Because of that, Bitcoin cannot face inflation in the same way that currencies, gold, and other assets do.
“Every other treasury asset, and I count $250 trillion worth of stuff – gold, fixed income, sovereign debt, cash equivalents, every other treasury asset’s got a negative real yield. What am I going to buy with it? There’s no other asset to buy with it.”
Square $50M Investment
In October, Jack Dorsey’s Square company announced its investment in Bitcoin, less than a month after MicroStrategy. The Twitter CEO purchased $50 million worth of Bitcoin at the time and moved Square’s Bitcoin assets to 1% of its total fund.
While MicroStrategy’s recent investment has towered over Square’s meager $50 million purchase, the event managed to push Bitcoin even higher. At the time, the price increased from $10,500 to $11,300 in less than three days. It is possible that investors have jumped into Bitcoin because Square’s investment served as another confirmation of corporate interest in the world’s largest digital asset.
Commenting on the choice, Square’s Chief Financial Officer Amrita Ahuja stated that “Bitcoin has the potential to be a more ubiquitous currency in the future.” Since the company is working on building products based on a more inclusive future, the step towards ‘adopting’ Bitcoin was only natural for Square.
As the second major news of a significant Bitcoin investment made by a corporate company, the event shed a positive light on the asset’s future. With Square, we have seen yet again that companies are prepared to purchase Bitcoin even if they must do so at high prices.
Grayscale Bitcoin Trust – 2.14% Circulating Bitcoin Supply
While Grayscale is an old example of Bitcoin’s high desirability, their investment decisions are still worthy to note. The Grayscale Bitcoin Trust Fund represents one of the first funds focused on cryptocurrencies. In total, it owns 449,596 Bitcoin worth $8.2 billion at the time of writing. Based on the total circulating supply, we can conclude that Grayscale owns 2.14% of all coins produced so far.
In 2020, GBTC nearly doubled its portfolio. According to data from Bitcoin Treasuries, Grayscale is the largest public Bitcoin owner in the world. While the fund is not a representation of Grayscale’s personal investments, it is still important to note that the fund consists of accredited corporate investors.
In this year, Grayscale serves as a third great example of institutional interest that continues to relentlessly purchase Bitcoin despite its frequent price oscillations. With the largest cryptocurrency approaching its old all-time high of $20,000, it is only a matter of time before other companies ‘give up’ and realize that Bitcoin has, after all, proved itself as a worthy investment option.
The two ways to acquire Bitcoin
Besides companies and investment funds, retail investors are interested in Bitcoin as well. While they may not own $425 million like Microstrategy’s Michael Saylor, everyday investors can still profit significantly by purchasing Bitcoin, far more compared to any other asset.
The decentralized cryptocurrency based on blockchain technology can be acquired in two ways, either by directly purchasing on an exchange or mining it.
In the first case, one may seek to purchase already mined coins from another user through a cryptocurrency exchange. The list of reputable and widely-used exchanges is big and includes a number of trading platforms such as Binance, Kraken, Coinbase, and OKEx.
There, you can create an account, verify your identity, transfer your funds from a bank, and then start investing in Bitcoin at any point in time. These trading platforms are intuitive and easy to use, requiring almost zero financial knowledge. If you are here for the long run and are purely looking to make a one-time investment, you can simply open a market position and purchase Bitcoin at the currently traded price. Otherwise, you might want to create a limit order to purchase coins at a lower price, if they ever reach them again.
This may be the easiest solution but it is not the only one. Apart from directly investing, one can also acquire Bitcoin by mining it. After all, the entire value of blockchain technology lies in the fact that miners actively contribute to the network and drive transactions up by confirming them. Without miners, there would be no Bitcoin at all.
What is Bitcoin mining?
While mining is more complex for beginners compared to investing, it is still a viable (if not better) option. When discussing this feature, mining is referred to as the process of mining Bitcoin by verifying transactions and receiving rewards in return for every verified block.
Mining is done by solving complex cipher puzzles with the help of computer hardware. Participants turn their computers into nodes and have them run all day to support the Bitcoin network by helping with processing transactions. Once a block is mined, it will distribute rewards to all its participants based on the amount of hardware power that they have contributed.
Just like the entire Bitcoin network, mining is also a decentralized act in which anyone can participate. All you need is a stable internet connection and powerful hardware that can turn Bitcoin mining profitable. But how do you mine and where? In the following passage, we will delve deeper into Crowmining, a reputable crypto hardware company that offers a unique solution for mining Bitcoin.
Mining Bitcoin with Crowmining
Crowmining is a Bitcoin mining company based in the U.S. that offers a unique proposition. Instead of setting up a hardware mining farm on your own and handling all the costs and technicalities yourself, Crowmining handles the entire process on your part. This enables everyday people who do not have the time or sufficient technical knowledge to participate in the Bitcoin network.
Essentially, the service provided by Crowmining boils down to renting a mining farm. As such, it represents one of the easiest and most profitable sources of passive income. By purchasing any leading ASIC mining product, specialized hardware designed specifically for mining cryptocurrencies, you can have it run in Crowmining’s facilities in Siberia.
From an online dashboard, you will be able to track the miners that you have purchased and monitor their progress in real-time. This progress includes profitability statistics, hash rate, and the amount of Bitcoin earned. Through the dashboard, you can transfer the coins to any wallet that you wish as you have full control over your digital assets.
The mining farm is managed throughout the entire life cycle of an ASIC, which lasts between three to four years, and all rewards are distributed on a daily level. Since the cost of power is significantly lower in Siberia compared to the rest of the world, Crowmining’s facilities allow you to mine Bitcoin at the lowest costs possible. While the national average in the U.S. amounts to 14 cents KwH, Siberian power costs only 5.5 cents KwH. Such a significant decrease in costs results in much higher profitability than with other mining platforms.
Why should I specifically partner with Crowmining?
Crowmining is a unique solution for all your Bitcoin mining adventures. Instead of struggling with mining alone, you can partner with a highly professional and well-established firm that provides its services for years.
The company is supported by a special engineering team that works inside the Siberian facility and handles all mining operations. With Crowmining, you are leaving all the ‘heavy-duty’ work to the engineering team, which handles things such as maintenance and hardware setup. Because of this, you are practically investing in a passive investment that you do not have to actively manage. All you have to do is monitor the profit that you are making.
Furthermore, we note that Crowmining deals with all the details, including the costs of running a farm. From your point, there is no need to directly handle electricity bills, pay for renting space to run the hardware, or spend money for importing and delivering a miner to your address.
Simply put, your only job is to purchase an ASIC miner and let Crowmining manage everything else. Home mining may not be feasible anymore, but thankfully solutions like Crowmining are there to bring Bitcoin mining to the ‘average joe.’
The platform currently features two ASIC miners from the leading Bitmain hardware producers. These products include the Bitmain S19 Pro 110 T/H and the Bitmain S19 95 T/H. The miners cost $2,999 and $2,399 respectively and are fully owned by you. Upon purchasing the hardware, the miners will be shipped to the main Crowmining facility in Siberia where they will work hard on mining Bitcoin.
Participating in this process is really easy and takes only three steps. All you have to do to become a miner is register an account at Crowmining.com, make a Bitcoin payment to purchase a miner and access the platform’s dashboard to monitor your BTC wallet and profits.
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