Bitcoin Forum

Hi,

The thoughts of a newbie here but please humour me. I've been taken in by bitcoin and feel that the potential for large gains over the course of the coming years is a quite high as the supply drops and people, organisations and possibly even countries start hedging their bets on cryptocurrencies. It seems to make a lot of sense to me that they would do so, however the fact remains that not many have.

I realise that I should probably be grateful that they haven't as the price would have already rocketed but at the same time it concerns me that they haven't. There's a lot of cash rich organisations, as well as hedge funds and mutual funds with extremely sharp investors at the reigns looking to hedge their bets and yet the vast majority of them seem to be choosing not to invest even a small fraction of their funds in cryptocurrencies. Why do you think this is and do you believe that it will change?

I did manage to find an interesting article that offers some insight and may be my only hope of adding any value to the subject but I would still be very interested to hear your opinions.

https://cointelegraph.com/news/5-reasons-why-institutional-investors-refuse-to-join-the-crypto-sector

They might be wanting to wait for the price to move higher so it doesn't look like they're the one to go first... Investing in a failing asset might give some bad rep too...

I think jp Morgan got fined $1bn from the supreme Court of Europe and I think that mightve been related to their bitcoin claims (but I'm not sure it was a while since I checked).

Also a lot probably don't have the resources... Negligence is easy too and some like "tried and tested" schemes...

You would think that they would want to get in before the price goes higher but I guess it does make sense that they don't want to risk their reputation.

I appreciate that a lot don't have the resources but there's a lot that do have the resources and it seems only a small proportion of them want to invest in Crypto.

I guess my concern is that I know that I don't know anything like as much about investing as the people that are making these decisions not to invest in Bitcoin and that my belief that Bitcoin will increase in value is merely a result of my position at the peak of mount stupid on the Dunning Kruger curve.

I think there is a lot more stealth buying of bitcoin taking place right now buy large institutions and investment funds than they would like you to believe. Particularly in the last quarter there has been a large uptick in interest from these funds and the Paypal announcement was really the icing on the cake. If one of the worlds largest payment processors is willing to take on the regulatory nightmare that is bitcoin, it seems to me it has broken the final hurdle that stopped it being taken seriously. Lots more investment managers can now point to Paypal when their clients ask why they think it is a good idea to diversify and hold some cryptocurrency assets.

it's not the same though. PayPal started with bitcoin just because they want to make more money while forcing their users to be stuck in their service while thinking they own bitcoin. it doesn't really cost them anything and "regulatory nightmare" is only for the exchanges that are not already regulated otherwise something like PayPal that already has all the information of its users and is 100% custodial has no issues.

Maybe a cat and mouse play again. Institutional investors like to play the market the way they can see it better. There are plenty of good finance group but they are subtle to announce when they are going in. Actually they will told the public but they already bought a long time ago. This maybe called as pump my bag method but of course how do we know it as blockchain appears to be decentralized and cant totally identify whose the owner of those wallets that coming in and out.

Because a lot of these companies instead(ands hould) use their cash to actually grow the company, not to buy speculative assets. If they were to buy things that they just think would go up in value, then they should've just started an investment fund instead.

You see the glass half empty.

The way I see it, this year there are more companies that own bitcoin than last year, and next year there will be more. Microstrategy owns almost $500 million in bitcoin, other companies also own. With the bull market we are entering, more companies will buy bitcoin by the FOMO.

I see the glass half full.

My opinion though, I think they're doing so but staying off the media, knowing fully well them been open about their purchases would drive the price upward and probably reduce their chances of getting better bargain on the buying rate. And when they finally do make their announcement they must have probably accumulated as much bitcoin as possible then use that their public announcement as an avenue for the price to pump and probably cashout out.

These firms careless about the success of the industry, if they're to involved themselves in the industry, they just want to make easily money which just got me wondering why we prioritize their involvement in the industry. On other note the bitcoin market is a very speculative one which should raise alot of concern to discourage them form buying into it.

As an individual, you can simply come to the realization that Bitcoin is a good investment and go right ahead to find ways to buy, for a public company with board of directors, it doesn't quite work that way, if one or more of the board members fancy Bitcoin as a good investment, they would need to spend some time explaining to the others why they think Bitcoin it is as well as going over the pros and cons, after which the next step would be the paperwork; buying at such a scale will take lots of preparations to be done right, I would assume a lot of companies are seriously considering Bitcoin, in addition to those that have already adopted a Bitcoin standard.

Are you referring to this; JPMorgan Chase & Co. Agrees To Pay $920 Million in Connection with Schemes to Defraud Precious Metals and U.S. Treasuries Markets (https://www.justice.gov/opa/pr/jpmorgan-chase-co-agrees-pay-920-million-connection-schemes-defraud-precious-metals-and-us)? It was not related to Bitcoin claims.

bitcoin price doesn't just go up because of lots of buyers, the more company use bitcoin for payment and business heads to cryptocurrency will make the price higher, but it depends, there are other things that are to consider for bitcoin price, small companies can't invest to bitcoin because they are in the different business or not leaning into crypto, what are we waiting for is big companies should use bitcoin as a universal currency that I think will be the reasons might reach another all-time high for bitcoin, again it will depend on how people will react

Of course businesses and corporations are buying Bitcoins, this year alone we've seen more than a handful of companies either investing in Bitcoins or using the coin as their reserve asset, it's good for the network and you wouldn't expect every company to make their investment plans public. Having said that, not every company has the 'balls' to invest in Bitcoin based on how volatile it is, most companies that aren't really cut out for the risks, will pretty much choose assets that are more stable than BTC.

But do not be concerned if businesses or corporations invest/don't invest in Bitcoin, since it's free from third party control it doesn't really matter who invests, except of course for adoption, the network is open for all to use it in the way they choose.

Why do you think that they haven't? To me, current 14,000+ is proof that big players are amassing BTC. Price has  so much room to grow of course and this is just a beginning, but somehow I doubt we would come even close to these levels if people just used BTC for paying some stuff and without investment funds joining the party.

With all this said, BTC is still quite volatile so it's still a risk, and you gotta be careful when you are in charge of multi billion dollar conglomerates, things can go south pretty fast.

Bitcoin price is still "unstable". It produces big ups and downs. Some don't want this; they want it "slow and steady", like, for example, gold.
Bitcoin was "advertised" by central banks as high risk. Some don't want that in their portfolio because it can cause reputation issues.
Bitcoin is not only going up, it goes down too. Remember the (363) days when it has fallen from nearly 20k to just over 3k?
Also the market is not properly regulated, making them over-cautious.

But in time all this will change.
The volatility will be reduced after a while, with every new (regulated) company joining the game the things will get in the way they expect to be and will convince more to join.
This will be good for the price and probably bad for us as individuals and possibly also bad for Bitcoin as philosophy.

There are 3 causes what I think the reason why we can't see that.

And I will list them bellow

1. Volatility
2. Legality
3. Adoption

Provably they are looking at this elements to see if they can benefit for accepting or buying it's since for now there are so many risk for accepting Bitcoin on their system.  That's why for now maybe all is just speculation but maybe once we can see some certain good action came from government maybe we can see them accepting it.

Ooooo it was in the US! And yeah still looks shady, they might be doing that with btc then or planning to...

That's the problem, that's the main problem that we need to change because most of the businesses are settling in using cash for their businesses. We need to change that mindset because bitcoin is good for investment, buying bitcoin is good but it does need a lot of courage when dealing with risks. Bitcoin is volatile and that's the thing that are holding them back before engaging to it.

We are in a more advance and evolved transaction and economy so we need also to adapt and know that bitcoin is existing in the market to help us become successful and grow.

It's literally not a problem. How is using your company's cash to grow the business a "problem"? So you buy bitcoin, then what? Just wait? Instead of actually investing in your business to grow it? If I allocated my non-bitcoin related business' funds(instead of my personal funds) into bitcoin, I'd give everyone a permission to give me a good slap in the face.

We are in the early days of cryptocurrencies even though it is a decade old already. You can't say that many business interested in Bitcoin, let's take paypal as an example for a very long time they are against cryptos but now they allow buy and sell then pay to their merchants with cryptos.Facebook is trying to bring their own cryptos. Doge coin. And lot of companies are yet to figure how they can get the benefits of cryptocurrencies.

Thank you for all the diverse opinions, I think most of these reasons given probably have a lot of truth to them in some ways. Either way, this forum has been great for learning and luckily I pumped into a decent chunk of a Bitcoin over the last week so my investments have started off well. Long may the bull run continue.


To be fair, the Paypal announcement is what got me interested as well and I'm sure that a lot of the money flying in at the moment has a lot to do with that. I guess it's possible that a spiral effect is already happening. If so, I got in at a very good time.





That's one of the things that I would have expected to see more of by now, large investments companies that have already invested in Crypto letting people know about it in order to pump the price but unless I'm missing  something it doesn't seem to be happening too much.



Yeah, I was more talking about the investment funds and cash rich companies that are looking for ways to hedge their excess cash rather than your average companies that need their cash for day to day running of the business.




I think my problem is that I see the glass too full at the moment and am trying to force a bit of healthy scepticism into my thinking. I'm actually banking on trippling my investment by the end of 2021 ;D

Seems, things are changing and some companies are going to convert their assets into Bitcoin instead of USD and other currencies, check: Is Bitcoin the best reserve asset? (https://bitcointalk.org/index.php?topic=5286199)
If you see, more and more businesses are interested in cryptocurrencies, for example, let's take PayPal, the giant provider that entered the market recently. It's not always necessary to directly buy bitcoins in business.
You know what? In business, investors are looking for a sweet spot where the reward is high and the risk is low. Bitcoin doesn't belong to that category, here, it's under the question mark but still carries a huge risk with the possibility of huge reward. People don't want to mess with things.

Because despite Bitcoin's recent great performance, it's still a very volatile, very risky asset, and unlike with stocks, no one can calculate its objective value. Businesses don't need a promise of sky-high profits, they just need some reliability. Bitcoin only makes sense if they put a very small amount into it. As for funds, they do trade it, just in small amounts, but it does become more and more common. There's also a lot of OTC trading going on that we don't know much about, which might be the place of institutional investors.

Still shouldn't be the right move to be honest. Companies, big or small, should have their cash ready(and definitely not in volatile assets) for potential business acquisitions and mergers that could help their company actually improve(e.g. Apple acquiring an augmented reality company and virtual reality startup just last month).

Not to mention that probably the last thing these companies' shareholders would like them to do is play it safe. Most investors want growth(hence why they're investing in these companies in the first place). And one thing's for sure, these cash-rich companies wouldn't want to lose their investors.

Crypto is in the forefront in terms of investment and business due to the rise and fall of the market many traders do not understand its proper method bitcoin use is also illegal in many countries that's why more businesses and investment funds aren't buying bitcoin. Failure to transact properly will result in loss just as you need to have a clear idea about your own business the general issues like income expenditure profit loss should be at the fingertips of the entrepreneur investors need to be associated with companies that are very reliable in order to improve their technology.

I do agree to a large extent, however if you are able to mitigate the risk and only invest a small portion of your portfolio in these highly volatile investments that are still likely to increase over time then surely it would still be wise to do so as long as they are able to sufficiently mitigate the risk.

I must admit the responses here have helped me to understand the thinking of these organisations and I can understand why many would choose not to invest in Bitcoin but I would have still thought there would be a small but significant proportion of cash rich businesses and investment funds who would be keen to invest if the investment was as likely to rise as I and others here seem to believe that it is.

Regardless, I'm happy with my investment and the profits that I have made so far and want to thank everybody who has replied as I now better understand why it's going to be so difficult for Bitcoin to attract huge investments from investment companies in the near future.

I guess as time goes on and more businesses decide to take the risk Bitcoin may well become a more secure asset capable of attracting the investments of such large organisations. If this were to happen in the coming years, would it be fair to speculate that the price could quite possibly shoot into the hundreds of thousands of dollars?

They actually are, but it can't be in a rush. They also carry out analysis or financial advice and can't just jump into buying a crypto asset. News like the PayPal accepting crypto and other news like celebrities showing interest has also pumped the price up but right now, the price of bitcoin is doing some correction and after that, there should be another pump.