For many years, institutional investors have seen Bitcoin a far cry from confusion and entertainment, but with little or no involvement. While attracting high profitability, they were deterred by Bitcoin’s childhood, lack of regulation and numerous headlines warning of hacking, bankruptcy and fraud in the early years, Bitcoin (BTC) did not have the entry and exit ramps required by most institutional investors, making it nearly impossible to obtain. To approve any corporate investment tool.
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Investing in Bitcoins until 2017
But something strange happened during the 2017 Rally. Because organizations said it was too risky at the corporate level, many Bitcoin insiders personally bought every available way.
They purchased bitcoins through bitcoin exchanges and ATMs and participated in the first coin offerings. Many of these people became passionate and even obsessed with Bitcoin, and with them, Bitcoin began to dig its roots in the financial world.
Bear market after 2017
During the bear market that followed the rise of 2017, a large number of Bitcoin products were created and launched specifically for institutional investors. Listed bitcoin miners have begun to give investors access to the core part of the industry.
Bitcoin holdings are securitized so that investors on large exchanges can freely speculate on the price of Bitcoin without setting up or using Bitcoin wallets. Firms have begun to borrow to buy and hold bitcoins because the speculation over a long-term rise in bitcoins is worth more than debt interest rates.
Bitcoin’s response to COVID-19
When Bitcoin plunged and jumped from a low of around $ 4,000 in March 2020, the global COVID-19 pandemic began. Governments around the world have largely followed the same strategy – restraining people and printing more money. Lockdowns, quantitative easing and fiscal stimulus were normalized before markets could fully absorb what was happening.
Markets became ineffective pricing mechanisms, not because the participants acted in bad faith, but because the participants only acted in good faith – believing this could not continue.
With cash inflows on a daily basis, the market has responded almost daily, not looking for valuable parking spaces for the capital. The market competes with itself over the amount and speed of capital investment. What would be reasonable person to invest in when nearly all economies and industries in the world contract and global stock prices soar to record levels?
On the topic: How has the COVID-19 pandemic affected the crypto space? Expert response
Buy and store bitcoins in 2020
This time for investors, everything was already in place when they started paying attention again. There have been insured products, entry / exit, prioritization, experience and many enthusiastic supporters in the larger organizations. The most important of these was the slopes. For the first time in the history of cryptocurrencies, investors were able to use their traditional tools and exchanges to invest in Bitcoin safely, easily, and without special permission. With the right machinery, companies and investors did what most investors should: buy and hold.
In the real world, the simplest solutions are usually the best. This is my intuitive logic, as it appears to include other seemingly normal laws of life, such as the 80/20 rule or the inevitability of death and taxes.
This also applies to Bitcoins. While there are many ways to earn big dollars on Bitcoin, mining, day trading, speculation and more, for most people around the world, regardless of who or where they are, the best investment strategy is to buy and hold Bitcoin.
The reason for this is clear: anyone can buy and hold bitcoin, but almost no one can beat the market forever. The industry is only growing at such an exponential pace that no one can keep track of everything that is happening now, let alone predict the future. You have to live and breathe the cryptocurrency in order to have a chance to surpass the market potential. However, we have seen real myths in this room in ruins, and we think they can do more than just hold Bitcoin.
On the topic: Will Bitcoin prove to be a reliable store of value in 2020? Expert response
Why is Bitcoin mining more profitable than just holding it
In the history of Bitcoin, mining has been a clear exception to the buy-and-keep rule. If you can create a scenario with an ideal combination of cheap energy and efficient mining, Bitcoin mining will be a profitable business in almost any economic scenario, and at any Bitcoin price.