FinTech Business

Should Businesses Consider Investing in Bitcoin?

Investing in Bitcoin

If you cast your mind back to April 16th, you’ll remember that Bitcoin was riding high after posting a record high price of $63,346.79. 

However, it has been a tale of woe for the market leading cryptocurrency since, with Bitcoin shedding approximately 50% of its value against a backdrop of increased regulatory scrutiny across the globe and negative comments made by entrepreneurs Bill Gates and Elon Musk (who had previously procured $1.5 billion in BTC tokens in February). 

We’ll touch more on the most recent events below, while asking whether or not BTC is a viable asset for businesses to consider investing in?

The Fall and Rise of Bitcoin

Musk’s purchase of Bitcoin and the announcement that his Tesla firm would start accepting BTC as a viable payment method initially sent prices soaring through February.

The value of Bitcoin continued to fluctuate above the $50,000 mark through March, before enjoying an unprecedented breakout above $60,000 in April.

However, Musk’s subsequent decision to stop accepting Bitcoin through his Tesla firm (citing concerns over the sustainability of the crypto assets mining procedures) suddenly turned the tide, as BTC shelved 17% of its value in just 24 hours. 

With China and other nations also poised to introduce more stringent crypto regulatory measures in the near-term, Bitcoin has plunged to just $31,739.29 as of June 27th, while seemingly facing heavy and unrelenting resistance in the $34,000 to $37,000 price range.

Overall, the price of BTC is now roughly 50% lower than it was 11 weeks ago, while it has hit a five-month low after it hit $30.534.00 prior to Musk’s initial investment on January 27th. 

Also Read: How To Turn Your Forex Hobby Into A Business

Is BTC a Viable Investment for Businesses?

With these points in mind, BTC hardly seems like a viable investment for businesses, whether you consider its recent, seismic losses or a prohibitive price point that remains in excess of $30,000 per single token.

What’s more, BTC is an inherently volatile and speculative asset, with a finite supply, a lack of tangible value and vulnerability to news stories and market sentiment.

However, a quick glance at the prices also shows that Bitcoin’s price is noticeably higher than it was 12 months ago.

From this perspective, the price of Bitcoin has increased more than three-fold in the last 12 months, suggesting that despite its interim volatility, BTC may be an asset that appreciates consistently in value over time.

The same can be said for alt coins such as Dogecoin, many of which have followed a similar trajectory to BTC during the last 12 months and are similarly susceptible to market sentiment. 

Of course, price changes in Bitcoin are most impactful on Ethereum in real-time, but such changes definitely create a ripple effect throughout the market and across a host of rival alt coins.

It’s important to keep this and the fundamental nature of crypto assets in mind before investing your capital, but there’s no doubt that this investment has the potential to appreciate greatly in the long-term.

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