Known as “Digital Gold” to big banks and investors and simply “The King” to holders and traders, Bitcoin is on the tip of everybody’s tongue these days. All for good reason as the price of the pioneer cryptocurrency recently exploded past its all-time high, actually more than doubling in value above the previous peak set back in December 2017. However, it’s not only the soaring price that’s got everyone talking.
High-end investors, big banks, retail superstores, major tech firms, fortune five hundred companies, and even governments are looking at Bitcoin as a store of value with incredible potential. They are dropping billions of dollars into the market with the intent to hold it as a reserve currency rather than trading it on an exchange. Due to its limited supply, Bitcoin is resilient to inflation and has greatly outperformed all other asset classes over the last 10 years.
Big names, bigger bags
Of the more prominent figures interested in Bitcoin is American billionaire hedge fund manager and macro investor Paul Tudor Jones. He stated that he’s buying Bitcoin as a hedge against the impending inflation he sees coming due to the massive money printing by the central bank. By his calculation, $3.9 trillion (approx. 6.6% of the global economic output) was printed just from Feb to May of 2020.
Then there’s MicroStrategy, the business intelligence company who have been advocating for and purchasing huge amounts of Bitcoin over the past few years, including a very recent and substancial $10 million purchase. The company now holds 70,784 Bitcoin (over $2 billion as of this writing). When asked why they are purchasing so much Bitcoin, CFO of MicroStrategy Phong Le stated: “The company continues to believe bitcoin will provide the opportunity for better returns and preserve the value of our capital over time compared to holding cash.”
The list of household names and celebrities that have praised Bitcoin and other cryptocurrencies is extensive as well. From world champion boxers like Mike Tyson, Manny Pacquiao, and Floyd Mayweather to hall-of-fame rappers like Snoop Dogg, 50 Cent, and Kanye West, they’ve all capitalized on the Bitcoin hype. Even money moguls like the former richest man in the world Bill Gates and the newly crowned richest man in the world Elon Musk have talked (or tweeted) about Bitcoin as well, but it’s the recent institutional money pouring in that’s creating all the buzz of late.
Bitcoin’s purchasing power
Aside from the aforementioned MicroStrategy accumulation, arguably the biggest crypto news to hit the scene recently was Paypal’s announcement that they are allowing users to buy, sell and hold Bitcoin on their platform. Hereby opening the crypto market to more than 26 Million users and Paypal’s merchant network, which is one of the largest in the world. The ability for users to make a purchase with Bitcoin, and a few other cryptocurrencies, anywhere Paypal is accepted, is a massive step toward the adoption of cryptocurrencies.
Paypal joins Square and Revolut as the major payment applications using cryptocurrencies for transactions, but they’re not the only ones. There are a decent amount of online casinos using Bitcoin to fund player accounts and for payments and withdrawals. Major retailers like Overstock, Starbucks, Macy’s, Home Depot, Walmart, and Hilton all accept Bitcoin payments along with several other well-known cryptocurrencies.
Acceptance and use of cryptocurrency is not a regional phenomenon, it’s gone global. Microsoft has been allowing users to top up their accounts and buy products on their marketplace with Bitcoin for several years now. Norwegian Airlines allows customers to purchase flights with Bitcoin. German and Venezuelan branches of Burger King accept crypto payments. Wikipedia accepts donations in Bitcoin. The list of companies just keeps on growing.
In addition to cryptocurrency usage, blockchain – the technology behind cryptocurrencies – is making huge strides toward mass adoption as well. Due to its versatility across industries such as supply chain, healthcare, government, insurance, banking, real estate, and many others, this innovative tech is being used by some of the largest companies in the world including IBM, Alibaba, Tencent, Nchain, Visa, Ford, Shell and more.
Why should I care?
The sheer fact that many of the world’s biggest companies, celebrities and investors are spending billions on cryptocurrencies gives credence that crypto is something to watch. Combine it with the fact that industries are using the technology behind cryptocurrencies to advance their businesses, and we can see there is more to this new tech than meets the eye.
When you factor in the impending Bitcoin shortage due to its limited supply, which companies are buying by the thousands with the intent to store it instead of selling it, now it’s easy to imagine the value has a high chance to rise. With the central bank printing USD at all-time-high rates, there is a huge risk for massive inflation and devaluation of the world’s reserve currency. As we know, Bitcoin is resilient to inflation, therefore further solidifying it as a strong alternative to USD and other fiat currencies.
All-in-all, as more companies open their doors to Bitcoin and cryptocurrency transactions, they are paving the way for mass adoption. So don’t be surprised the next time you get a coffee or buy a happy meal that there’s a Bitcoin payment option, “The King” is here to stay.