The potential of Bitcoin as an investment asset and global reserve

An open, alternative, global, decentralized, transparent and incorruptible digital financial system, Bitcoin has proven to be a better store of value than gold.

As governments lose confidence, Bitcoin and cryptocurrencies gain in adoption globally. The cryptocurrency industry now boasts more than 200 million users worldwide; a figure that grows every day with the arrival of new followers and the incorporation of new companies and institutions.

Recently, the South Korea Teachers Credit Union (KTCU) reported about your intention to invest in Bitcoin. The mutual, which manages more than 47,000 million dollars, is placing its trust and the future of its clients and investors in the cryptocurrency biggest in the world. The Korea Teachers Cooperative noted that a portion of its funds under management will be invested in bitcoin through a bitcoin ETF (exchange-traded fund) by the first half of 2022.

KTCU, which offers financial services such as long-term savings, insurance, loans and much more, is interested in exposure to Bitcoin, due to its potential for long-term appreciation. SkyBridge Capital CEO and hedge fund manager Anthony Scaramucci recently said that Bitcoin has proven to be a good investment and future value hedge. Scaramucci claimed that his Bitcoin holdings, valued at around $270 million last year, are now trading above $1 billion; a revaluation of more than 300% in the last 12 months.

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Bitcoin, world store of value

The potential of Bitcoin as an investment asset and store of value seems to be giving Tesla, the electric car company owned by Elon Musk, pause. In a presentation Recently before the United States Securities and Exchange Commission (SEC), Tesla hinted that it may be about to resume payments in Bitcoin. Musk, one of the richest men in the world, stated that inflationary pressure in world markets and the devaluation of fiat currencies is not temporary and that cryptocurrencies such as BTC can help alleviate this pressure and protect long-term value. . Musk maintains personal investments in Bitcoin and other cryptocurrencies, such as Dogecoin and ethereum.

Twitter and Square, MicroStrategy and Ark Invest CEOs Jack Dorsey, Michael Saylor and Cathie Wood agree with Musk, supporting Bitcoin as a practical solution to hedge against inflation and preserve value. In fact, MicroStrategy is the largest institutional investor in Bitcoin today, with over 114,000 BTC in your possession, valued at more than 7,000 million dollars at the time of this edition. Saylor has said that MicroStrategy will continue to stick to its strategy of investing all of its surplus cash in bitcoin, making the cryptocurrency its primary reserve asset.

Likewise, the CEO of MicroStrategy stated that the recent intention of the United States Securities and Exchange Commission (SEC) and other regulators to control the market for stablecoinswill drive the adoption of Bitcoin as a global reserve asset.

“Regulatory clarity on stablecoins will accelerate the adoption of Bitcoin as the global reserve digital asset (store of value) and the USD as the global reserve digital currency (medium of exchange).”

Bitcoin, cryptocurrencies and Fiat

US Senator Rand Paul also spoke out in favor of Bitcoin a few days ago. Paul stated that Bitcoin may become the main reserve currency in the world, thanks to its growth potential and the loss of trust in governments.

During a interview for Axios, Paul spoke about the unreliability of fiat currencies, which are not backed by anything beyond fiat and the promise of value from mostly non-transparent governments. Paul emphasized his support for Bitcoin and noted that the cryptocurrency can act as an alternative and efficient global reserve currency.

What drives crypto adoption?

The use of crypto assets skyrocketed in the last year, as a result of the expansion of the Covid pandemic. The shutdown of the entire world caused society to embrace crypto assets even more, and not only to send and receive value, but as a store of value. As Chainalysis pointed out in their report Geography of Cryptocurrencies this year, cryptocurrencies grew more than 880% in adoption since 2020; a reality that propelled his courage to new heights.

To date, the entire cryptocurrency market reaches a capitalization of $2.73 trillion; this is 800% more than the value they collected for the month of October last year. Likewise, JPMorgan analysts consider that the current appreciation of Bitcoin and cryptocurrencies, in addition to being driven by global adoption, is also a product of current inflation levels.

“Bitcoin is being seen as a better hedge against inflation than gold”, point out the strategists of the prestigious US bank; while emphasizing that rising inflation concerns will see significant new capital flow into Bitcoin, further appreciating its price.

A new digital alternative

Scaramucci believes that anyone who dares to study and learn about Bitcoin and its underlying technology, and understands its value as a cryptocurrency and as an alternative financial system, will end up investing in BTC. An example cited by the fund manager is the arrival of Ray Dalio in the cryptocurrency ecosystem. “Look at Ray Dalio, a Bitcoin Skeptic, Now a Bitcoin Investor”said.

Although cryptocurrencies, which were born with Bitcoin in 2009, were initially designed as a means to transfer value in a global and decentralized way, they are now present in different fields of society. Its current application and uses as investment and reserve assets is much greater, in the case of Bitcoin, than as a means of exchange and transfer of value.

Thus, from retail investors, to large corporations, cities and entire countries begin to join more frequently within this digital ecosystem. new ones arrive every day news of new players or powerful companies that are thinking of keeping or are already investing part of their holdings in some cryptocurrency. For Bitcoin and crypto asset advocates, there is no more practical solution to hedge against long-term inflation than BTC and digital assets.

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