A large number of businesses have recently begun storing a considerable amount of their Bitcoin (BTC) alongside some other cryptocurrencies. This decision had come after the firms and organizations had decided to boycott the idea of fiat conversion.
Among these businesses had been Tesla, one of the world’s biggest organizations led by the visionary Elon Musk. Additionally, Oakland Athletics Suite Payment services had also joined in. Both of these businesses have been accepting Bitcoin as a form of payment for a while now, and both have also made it known to the public that they have no interest in the conversion of any payments to fiat. As of the time of this writing, it is unclear as to how long this will continue, as both have declared themselves as official Bitcoin hodlers.
Traditional firms and businesses are not parting with their Bitcoin and here’s why
Perhaps the biggest reason is due to the fact that businesses should decide to invest in Bitcoin mainly for the need to meet consumer demand. The risk factors may be greatly reduced. Since Bitcoin and cryptocurrencies, in general, are very volatile, momentary losses can be managed via the swift conversion of payments to either fiat or stablecoins.
However, when businesses do decide to hold Bitcoin and therefore knowingly take on the risks of doing so, it could simply imply the strong belief that the firms do have in Bitcoin and in cryptocurrency. This could also be due to the company’s executives or directors being huge supporters of Bitcoin themselves. Elon Musk, for instance, truly believes that the inclusion of cryptocurrencies is inevitable, and so Tesla is trying to get ahead of its competition through his guidance.
Commercial businesses and firms may choose safer altcoins instead
As aforementioned, cryptocurrency, by its very nature, is extremely volatile and unpredictable. Most businesses cannot hence afford to invest huge amounts into cryptocurrency due to the fear of experiencing huge losses. This is why a number of firms and businesses may elect to invest in relatively safer options that can take the form of altcoins. Others might be able to partially invest in Bitcoin while still choosing a safer alternative simultaneously.
Ultimately, the decision to hedge against rising inflation may also be a major factor as to why businesses may be holding Bitcoin. The allure of cryptocurrency as a long-term investment is extremely appealing to many, perhaps enough to take on the various risks associated with it.
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