Introduction To Bitcoin Ⅲ

For a long time, it was unthinkable that publicly traded companies would ever purchase Bitcoin to add to their reserves. Businesses were hesitant to adopt the leading cryptocurrency because of its reputation for volatility and perceived outlier status. With the purchase of Bitcoin by several large institutional investors over the past two years, this taboo has been effectively broken.

Bitcoin “Partnerships”

In August and September of 2020, cloud software business MicroStrategy purchased $426 million worth of Bitcoin, setting off a rush of buying from other companies. Payments firm Block and electric vehicle maker Tesla followed suit. As Bitcoin’s institutional support seemed to grow, the 2022 cryptocurrency crash hit. In the wake of the tech stock market crash, the value of businesses’ Bitcoin holdings took a significant hit.

Based on data gathered from many sources, including financial statements and the media, here is a list of Bitcoin’s top investors.

MicroStrategy

Leading business analytics company MicroStrategy has made Bitcoin its primary reserve currency.

The company, which develops mobile applications and cloud-based services, continued its Bitcoin buying binge aggressively throughout 2021 and 2022—accumulating millions of Dollars of the currency despite the market’s decline in 2022. 

Galaxy Digital Holdings

According to bitcointreasuries.org, Galaxy Digital Holdings, a merchant bank specializing in cryptocurrency, possesses 16,500 BTC, or slightly more than $356 million, at today’s exchange rates. Michael Novogratz founded the company in January 2018 and has partnered with cryptocurrency companies like Block. and BlockFi. Unsurprisingly, Novogratz is a staunch Bitcoin supporter. 

Voyager Digital LTD

Voyager Digital, a cryptocurrency brokerage, has 12,250 BTC on hand, according to bitcointreasuries.org, which is worth almost $265 million at the current pricing. The company, which aspires to serve as a one-stop destination for exchanging digital assets, recorded quarterly sales of $50.4 million since May 2021, up 16 times from the past quarter. “We foresee exponential acceptance of crypto as an acknowledged and alternative investments asset class,” CEO Steven Ehrlich remarked at the time.

Tesla

In an SEC report made in December 2020, electric vehicle maker Tesla revealed that it has committed “approximately $1.60 billion” to Bitcoin. In addition, Elon Musk, President of Tesla, stated that the company liquidated 10% of its BTC holdings in the first quarter of 2021 “to establish liquidity of Bitcoin as just a substitute to maintaining cash on financial statements.”

Bitcoin Integration

With Bitcoin (BTC) support, smart contracts can take advantage of the world’s largest cryptocurrency. As a result, they are opening up new possibilities for DeFi and decentralized applications.

To store, receive, and transfer bitcoin, Internet Computer Containers can now manage ECDSA signing keys and save bitcoin addresses. In addition, BTC smart contracts can also be built with the cryptocurrency’s native protocol in mind, and they can store their private keys safely and natively. It paves the way for novel Bitcoin use cases, such as social platforms that allow users to send bitcoin through instant messages (like OpenChat) and decentralized applications (dapps) that support private financial transactions utilizing zero-knowledge proof (like Spinner).

How is Bitcoin Disrupting The Traditional Payment methods?

Legislators and banking authorities are getting anxious about online shops’ growing acceptance of Bitcoins. Bitcoin proponents acknowledge that digital assets will be disruptive but will not displace the Dollar or Euro. In the words of BitPay CEO Anthony Gallippi: “Banks charge various costs to customers. With Bitcoin, they personalize many of their everyday payment needs and save bank fees. Therefore banks dependent on fee income could be hit the most.”

The currency known as bitcoins exists only in cyberspace. All Bitcoin data is encrypted and kept in the cloud. Therefore, it is not governed by any central authority. Instead, through “blockchain” technology, exact copies of database data, including the value, custody, and history of each BTC, are distributed among Bitcoin users worldwide. Ledger entries are immutable, and all blockchain nodes must agree to modify before the ledger is updated, guaranteeing its honesty and integrity.

Bitcoin is only valid for instant, peer-to-peer transactions between two people. The actual value of BTC is that its users remain anonymous. There isn’t any need to “know your client” while transacting with Bitcoin because the veracity and correctness of the blockchain may be used as a proxy for an individual’s creditworthiness.

In 2008, a developer from Florida used 10,000 BTC to pay for pizza delivery. This event is often credited as the inception of Bitcoins. August of 2010 saw its worth at around 6 cents. After reaching a high of over $1,000, the price has since stabilized at about $586 as of August 2016. Any individual can receive it as payment, and the lack of intermediaries such as banks or exchange charges makes international transactions cheap, quick, and convenient. As a result, Bitcoin is now accepted by many merchants, including Microsoft, PayPal, and Dell.

How Bitcoin Impacts The Economy

Bitcoin is very different from several other currencies. Its use and widespread adoption have already significantly affected the world’s financial institutions. But first, I’ll explain the impact of Bitcoin on the market.

Shifting Investments

Traditional assets dominate many investors’ portfolios. Modern investors now own Bitcoin. Bitcoin can help investors even when hyperinflation and other factors devalue conventional assets.

The Emerging Market

Bitcoin has given rise to a new market that is not governed by any one body. Therefore, bitcoin transactions, whether buying or selling, should ideally not require the services of a bank or other financial intermediary. 

The Stock Market

The stock markets have also felt Bitcoin’s indirect impact. Bitcoin and similar technologies are of interest to some publicly traded corporations. Significant price increases have also confirmed Bitcoin’s existence in stock markets. This virtual currency has varied effects on economies, which is why some nations have banned it (China).

Conclusion

If it sounds straightforward and groundbreaking, it is. There is a restriction to the number of Bitcoins that can possibly be generated, so there is no risk of a monetary authority or government inflating cash when they encounter problems. However, the virtual currency has risks. FBI and other organizations monitor its use, even if it’s legal. Given that there is no external intermediary to handle a payment adequately, its absence of regulatory monitoring supports money laundering, public safety, and tax fraud, among other illicit acts.

Find Bitcoin Part 1, Bitcoin Part 2 and Bitcoin Part 4 here!

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