Why it’s worth considering cryptocurrency as an alternative investment

Cryptocurrency has been the talk of the digital tender town in the last few years. When Bitcoin price shot up in 2017, it entered into the foray of money in the most dramatic manner possible.

While it might have made its mark in the economic industry as a volatile, risky digital resource, Bitcoin has started to prove its worth as an institutional asset over the past few years.

Adoption of Bitcoin into the Institutional Market

Although Bitcoin has its roots in cypherpunk (activity related to privacy and cryptography to combat social and political issues), the asset has gained recognition from financial institutions for the benefits it boasts. Not only are investment companies and venture capitals showing interest, but the concept of digital tender has sparked the curiosity from pension and retirement funds, leading universities, banks, and technological giants.

Investment companies are looking to Bitcoin and crypto

Venture capitals such as Andreessen Horowitz are launching multi-million dollar cryptocurrency funds; showing that the path to investment is not the same as trading. While institutions and businesses are investing in blockchain, the technology is getting more and more attention, which leads to more investment.

Since businesses are a vital cog in the economic wheel, it is worth noting when other assets are considered. In this day of innovative corporation, it would be naive to rule out cryptocurrencies and Bitcoin before seriously considering the asset.

Universities are showing interest in cryptocurrency

The world’s top universities have started offering classes which teach students the importance of cryptocurrency and the technology on which it is founded. These academic institutions are calling blockchain the leading technology in the fourth industrial revolution and are putting money where their mouths are.

Universities such as Harvard, Stanford, Dartmouth College, and the Massachusetts Institute of Technology (MIT) have created funds which have seen millions of dollars invested into blockchain and cryptocurrency. Yale’s David Swenson, who is known as one of the leading figures in institutional investment, has seen that Yale’s funds is involved in a $400 million USD cryptocurrency fund.

Cryptocurrency in retirement funds

The FBC Bitcoin Trust, a Canadian Bitcoin fund, has been granted legal mutual fund trust status in the country, which means that it is allowed to invest in cryptocurrency through retirement and government-registered accounts accounts. This is ground-breaking as it shows that there is longevity in the investment of digital tender.

Nextdoor to Canada, American funds for pensions are also adopting cryptocurrencies. Morgan Creek Digital, an investment firm, is driving this through crypto-focused hedge funds.

Banks who are using blockchain

The Industrial and Commercial Bank of China (ICBC), China Construction Bank Corporation (CCB), and the Bank of America are all looking to integrate blockchain technology into their systems. ICBC is looking to blockchain to verify digital certificates through a decentralised, trustless platform, CCB is using a blockchain platform developed by mega-corporation IBM to streamline processes related to selling financial products and the Bank of America is looking to the Ethereum blockchain to automatically create letters of credit.

Corporations exploring the technology

Both banks and big companies have begun to invest in Bitcoin and blockchain on a high level. Toyota, Apple, BMW, and Microsoft are only a handful of the mega-corporations who have put a wealth of resources into the technology. Furthermore, there are businesses such as Samsung have both integrated blockchain into their systems, and begin to offer vital cryptocurrency services to their customers. For example, the new Samsung Galaxy smartphone boasts Cryptocurrency Key Storage built in for Bitcoin, Ethereum, and other altcoin users.

This gives more evidence to the rising significance of the technology. Even though they are not the same, blockchain has become synonymous with Bitcoin and it is advised to understand the relevance of both the technology and the asset in the financial economy.

Why Bitcoin price doesn’t dictate cryptocurrency adoption

While Bitcoin is in the middle of its longest bear run, the price isn’t showing the entire picture. As evidenced, the adoption of cryptocurrency is spilling in through the institutions. Ultimately, this is also where the money is. While traders, Bitcoin whales and early investors are important to the digital economy, the real money is linked to the corporate funds. It’s remarkable then that, despite what has been dubbed the “cryptocurrency winter”, the financial firms are still noting the importance of cryptocurrency as an alternative asset.

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