Future of Bitcoin – Does it have space in the Company’s Balance Sheet?
It is an indisputable fact that in early 2021 Bitcoin has seen tremendous growth. It has reached over $58,000, which is triple the peak of the 2017-2018 boom.
We are entering into an age where institutions are turning to Bitcoin since many countries are following it. And to make it worse, they are also afraid of the risk of inflation.
Such conditions clearly state that institutions like pension-funds will start giving undue attention to Bitcoin.
Unlike the year 2017, this year it will be run acceptably in the traditional financial world. The enterprises and institutions have started adopting crypto assets, which is a driving force for the year 2021. One of the greatest examples is Tesla investing $1.5 billion in Bitcoin.
Apart from this, large institutions are understanding Bitcoin’s importance as a store of value. And many other institutions are also adding it to their balance sheets, such as Goldman Sachs, Standard Chartered, and many more.
But, the need of the hour is that the crypto landscape needs to change so that Bitcoin can move to a traditional setup. Institutions cannot use private keys that can get lost or transact funds.
Does Regulation matter?
The new crypto regulation in the U.S. is making it easier to hold Cryptocurrencies since it is becoming more certain. Last month, the office of Currency Comptroller, provided Cryptocurrency regulatory assurity. The acting currency comptroller told that there will be complete access to the blockchain directly. Hence, it is a huge step for institutions that want to hold crypto.
The company also said that it is expected to see development in the custody of digital assets, which will allow more institutions to enter the market. Recently, Goldman Sachs issued an information request to explore the bank’s digital assets. Although the details are not finalized yet, these key steps will fuel the market.
Crypto Next Generation
These institutions have a huge team to manage new crypto holdings and smaller companies have started adding crypto to their balance sheet. Since big and small companies are starting to hold crypto, it is becoming clear that newer companies will act as investors. This also includes the companies which do not have crypto and blockchain as their core business.
The small companies that have been holding cash are now bothered about their liquidity. With the overall growth, the companies can buy, sell, and engage in digital currency.