Why aren't more businesses and investment funds buying Bitcoin?

[shield132]

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?
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.

[hatshepsut93]

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.

[mk4]

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.

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.

[Salauddin1994]

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.

[Bergkampsballs]

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.

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.

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?

[Krislaw]

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.