Bitcoin (BTC) is the best reserve asset we’ve ever had and more and more large companies are recognizing that.
Infinite money printing and artificially low interest rates make fiat money anything but valuable.
Over a period of 100 years, it’s only natural that your assets lose 90% of their purchasing power.
This makes bitcoin as a form of money that no one can add to for companies with a large reserve. At the time of writing, 3.6% of all Bitcoin Era scamis already on the balance sheet of some large companies.
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Enormous potential for bitcoin as a reserve asset
At the top of the list of companies with bitcoin on the balance sheet are MicroStrategy (38 thousand bitcoin) and Galaxy Digital (16 thousand bitcoin). Although the amounts involved are enormous, it’s a drop in the ocean if we look at the largest companies in the world.
Nine companies in the S&P 500 alone are sitting on a mountain of $600 billion in short-term investments and cash. If these companies invest only 5% of that amount ($30 billion) in bitcoin then the price could easily go over 5 times.
Bitcoin now has a market cap of over $200 billion, but don’t forget that there is only a small amount of bitcoin for sale. Once these get into the hands of hodlers, the price can go very quickly.
Bitcoin doesn’t belong to the establishment, but its potential is enormous.
Most companies still see bitcoin as an alternative investment, but that doesn’t diminish its potential. According to Fidelity, the alternative investment market grew to $13.4 trillion by the end of 2018.
Even if a small portion of that money were to go towards bitcoin, the price is likely to go through the roof. To understand why bitcoin is so interesting for companies, we need to take a theory by Michael Saylor.
„A good way to evaluate an investment is to grab $100 million, fast forward 100 years and ask yourself what would happen. If I had $100 million in trust money in the year 1900 and stole it from a major bank, I would be exposed to two risks; the risk of the bank collapsing and inflation. Virtually every major bank falls over a 100 year period. Combine that with inflation and you have a 90% chance of losing everything.
Bitcoin doesn’t know these dangers and that makes the digital currency an interesting alternative to store your assets, says Saylor.
