So far in 2020, we’ve seen big companies like PayPal, JP Morgan, and MicroStrategy enter the crypto world, joining adopters like Square and the People’s Bank of China. Along with exchanges winning banking charters and regular banks starting to offer crypto custody, the cryptocurrency industry is expanding – and businesses are racing to find the best cryptocurrencies to invest in and scrambling to learn how to offer it to their users.
Likewise, tech-savvy generations wary of Wall Street are starting to look for a place to park their money, and companies are rapidly working to provide alternatives to traditional financial products, such as crypto trading and Bitcoin IRAs. In business, having a first–mover advantage tends to pay off well. Cryptocurrencies like Bitcoin and Ethereum are no different, and many companies are already laying the groundwork for their crypto investments.
MicroStrategy has recently been on front-page news since outspoken CEO Michael Saylor began emphatically praising Bitcoin’s investment potential. After an investment in Bitcoin equaling $425 million, the company took on Bitcoin as its primary reserve asset, and Saylor became one of Bitcoin’s biggest supporters to cross over from traditional finance. In addition to the decision to put most of their reserves into Bitcoin, MicroStrategy has also compiled a list of resources for other companies looking to do the same. According to Saylor, after considering almost all traditional investment options, he says Bitcoin “seems like the ideal long-duration asset.”
Square is known as one of the original players in the Bitcoin game, with CEO Jack Dorsey being an avid early supporter. An international payments platform with a market capitalization of $83 billion, Square opened up Bitcoin purchases to their Cash App users in 2018. Since then, Square’s revenue for Bitcoin surged more than 600%.
With over 160,000 Bitcoins purchased through Square in the third quarter of 2020 alone, Square is selling Bitcoin at about twice the rate it’s being mined – hinting at a possible supply crisis. Meanwhile, like MicroStrategy, Square itself has spent $50 million on Bitcoin for its own company treasury, putting roughly one percent of their assets into what Dorsey believes will ultimately be the world’s single currency.
PayPal’s more recent entrance into crypto is showing similar results. PayPal rolled out its crypto program to its more than 300 million users – but it doesn’t plan to stop at simply buy and hold. With its network of over 26 million merchants in more than 200 markets, PayPal also plans to seamlessly integrate crypto as a payment method for any PayPal purchase and plans to expand to its popular Venmo payment app sometime next year. This means millions of people have access to invest in cryptocurrencies.
The People’s Bank of China
The People’s Bank of China (PBOC) has been exploring digital currencies since 2014. In 2019, however, the announcement of Facebook’s plan to pursue its cryptocurrency, Libra, catapulted the PBOC into fast-tracking their own digital asset’s development. As of April this year, China is testing their digital yuan in select cities like Shenzhen and Chengdu, in addition to future venues of the 2022 Winter Olympics. South China Morning’s report shows that China is still in the early stages of cryptocurrency acceptance, and transactions hit 300 million dollars. China’s multi-purpose WeChat app – used for everything from social media to payments – already has roughly 1.2 billion users, and in a country known for its digitization, analysts expect that the switch to the digital yuan will be “seamless.”
The Development Bank of Singapore
The next giant rumored to enter the crypto space is the Development Bank of Singapore. While official statements have not been made, DBS did briefly include a page on their website detailing what looks to be not just crypto purchases or custody, but an entire cryptocurrency ecosystem that would support financing for businesses by allowing them to create and sell tokens to raise capital.
Crypto adoption amongst massive companies is accelerating, and purchases by both businesses and their customers will drive up the price as more people pile onto the Bitcoin bandwagon. Offering in-demand crypto products like direct purchases into cryptocurrency IRAs, we help educate our investors with information on how to best invest in crypto and how to make money with the Bitcoin, Ethereum, and other cryptocurrencies provide. The trend of increasing demand, together with limited supply, suggests those who enter first will likely be rewarded.
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