Dear Reader,
Square and recently Tesla decided to invest part of their cash reserves in Bitcoin. Tesla, in addition, is contemplating adopting Bitcoin as a means of payment for its electric vehicles.
It is a fact that many technology entrepreneurs and many other technologists are extremely interested in Bitcoin and cryptocurrencies. Technologists, in general, are highly intrigued by new products and new developments. Bitcoin is at the intersection of finance and technology. Thus it is not surprising that technology companies like Square and Tesla are the pioneers of Bitcoin adoption.
As regarding other large corporations like for example General Electric, Pfizer, Nestle, Mondelez, Altria, Volkswagen, BMW, Toyota and others the matter is more complicated. In order for such large blue chip corporations to accept Bitcoin, Bitcoin's price volatility must decrease. Another factor is governments' seal of approval on Bitcoin by adopting laws regulating Bitcoin. If Bitcoin is regulated its price volatility will decrease. On the other hand, government regulation of Bitcoin could decrease the appeal of cryptocurrencies as an untainted alternative to money.
The largest by market capitalization technology companies like Apple, Amazon, Microsoft, Alphabet and Facebook are an interesting case. By definition, as technology companies the aforementioned large 5 IT companies are open to new innovations and they are likely to adopt Bitcoin.
On the other hand, Apple, Amazon, Microsoft, Alphabet and Facebook are huge, now established corporations with tens and even hundreds of billions of USD yearly revenue. If they accept Bitcoin as a means of payment for their services or start investing their huge cash and cash like reserves in Bitcoin and Bitcoin's price falls a lot or Bitcoin is even banned by governments this could threaten the financial well-being of these companies.
Facebook, as is known, is contemplating introducing its own cryptocurrency stable coin. If one of Apple, Amazon, Microsoft, Alphabet and Facebook adopts first a cryptocurrency it is highly likely that it will be Facebook.
Basically, for Bitcoin to receive mass corporate adoption, Bitcoin has to go a long path forward. This chiefly entails lower volatility of Bitcoin, most probably by being tied to a basket of leading currencies like the USD, EUR, JPY and GBP. This, however, could prove a disadvantage in the long-term for Bitcoin's allure of a pure, clean alternative to fiat currencies.
Disclaimer: The blogposts and comments on this blog and posts on social networks(Twitter, LinkedIn, Facebook etc.) are not investment recommendation, are provided solely for informational purposes, and do not constitute an offer or solicitation to buy or sell any securities. The opinions expressed on the blog are Petar Posledovich's. Petar Posledovich does not guarantee the accuracy of the information presented on this blog and social networks. The information presented is "as is".
Petar Vladimirov Posledovich is not liable for any investment losses incurred by reading and interpreting blogposts on this blog and posts on social networks.
Conflicts of interest: I may possess some of the securities, currencies or their derivatives mentioned in the blogpost and posts on social networks(Twitter, LinkedIn etc.)!
Respectfully yours,
Petar Posledovich
1 comment:
The price of bitcoin is high risk/high reward.
There are two options - either it goes to very high or it goes to zero.
It can go very high if broadly adopted and because of its scarcity. It can go to zero, if some competition comes in or it is outlawed.
Either way I would not buy at 40 tsd. US dollars, because it is high risk.
If it goes to 1 tsd. US dollars I might consider buying it, because then it will be quite cheap and even if I lose those money it would not hurt that much and then it might be considered a low risk with a proven high potential.
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