Everyone Can Benefit: How To Invest In Bitcoin Without Buying Bitcoin
The outlook for Bitcoin is good. But for many investors, buying cryptocurrency is too complicated. But there are other ways to benefit from it as well.
We show how you can now benefit from Bitcoin without buying the Bitcoin directly. These are not weird investments, but promising companies that are now investing in BTC. In the meantime, future companies are using Bitcoin as a reserve currency. How everyone can benefit from it.
MicroStrategy
That was quite a bang when the US company MicroStrategy announced on August 11, 2020 that it would hold part of its cash reserves in the cryptocurrency Bitcoin. More specifically, the company invested around $ 250 million and used it to buy 21,454 Bitcoin.
Commenting on this, MicroStrategy CEO Michael J. Saylor said, “Our investment in Bitcoin is part of our new capital allocation strategy designed to maximize long-term value for our shareholders.” And that worked very well. Because of this news alone, the price of the software manufacturer’s share jumped massively: within the next two trading days, the value rose by 18.6 percent.
“This investment reflects our belief that Bitcoin, the world’s most widely used cryptocurrency, is a reliable store of value and an attractive asset with more long-term appreciation potential than holding cash,” says Saylor, explaining why the company bought so much Bitcoin. But that wasn’t all. Because MicroStrategy acquired another 16,796 BTC in mid-September for the equivalent of 175 million dollars. The software manufacturer now owns 38,250 BTC, which the company bought for 425 million dollars. After the second purchase, the share rose again enormously, then came back a little.
Square
But MicroStrategy is not the only crypto-remote company that is now investing in Bitcoin. Because at the beginning of October, Twitter founder Jack Dorsey stepped up with his payment service provider Square: Square acquired Bitcoin for the equivalent of 50 million dollars. Square bought the 4,709 Bitcoin on October 8th. Here, too, the share price rose – although not as strongly as with MicroStrategy.
“Square believes that cryptocurrency is an instrument of economic strengthening and offers the world the opportunity to participate in a global monetary system that corresponds to the company’s purpose,” the company writes in the press release. The company also stated that with this $ 50 million it invested almost exactly one percent of its total assets in Bitcoin.
Jack Dorsey, who is also the founder of Twitter and Square, has long been a fan of cryptocurrencies and especially Bitcoin. He recently announced that Bitcoin will have a major impact on the future of Twitter. Twitter officially has nothing to do with Bitcoin yet. But if we allow ourselves the mental game that Twitter also invests one percent of its total assets in BTC, that would be 125 million dollars. That’s not that much yet. But what if a few more companies want to invest their cash reserves in Bitcoin?
Bitcoin as a reserve currency
484. As many companies could theoretically buy as much Bitcoin as MicroStrategy did. The company owns 0.207 percent of the 18,516,000 Bitcoin that exist in the world today. More than a million Bitcoin are most likely lost forever, many private individuals already own Bitcoin and many large institutional investors. The supply of Bitcoin is super limited. If companies start buying up Bitcoin now, the price is likely to skyrocket.
If Apple alone were to invest one percent of its total assets in BTC, the company would spend around $ 3.2 billion and thus be able to buy a total of 278,261 Bitcoins as of mid-October 2020. That alone would be 1.5 percent of all Bitcoin available today. The market could be emptied in an instant if even a few dozen companies want to put their money in BTC.
But why do so many do that? The principle of supply and demand applies to Bitcoin. Today there are already 18.5 million Bitcoin, in more than 100 years it will be 21 million. And then it’s over. While our money (US dollars, euros, British pounds and many more) can be printed in unlimited quantities by the central banks of the world, this is not possible with Bitcoin.
Some use Bitcoin as a reserve currency to hedge against inflation and zero interest rates. A disadvantage of BTC is, of course, that the cryptocurrency itself does not generate any interest. But the expected increase in value is higher than with zero percent interest per year. If investors now want to benefit from it, but do not want to buy the Bitcoin themselves, there is now a completely new and unexpected possibility: They could invest in companies like MicroStrategy or Square, which own BTC. But not only Bitcoin plays a role here for the performance of the company, but also many other factors. Everyone must be aware of this risk.
And here is a very good overview of all public companies that invest in Bitcoin. But be careful: This list is for information only and does not represent a purchase recommendation.
