In recent years, institutional investors have started accumulating BTC in a big way. According to a survey done by Fidelity, it was evident that more than 36% of crypto assets were owned by 800 institutional investors. Apart from that, another survey done by Globenewswire, which specializes in crypto-asset insurance, hedge funds are likely to increase their holdings in cryptocurrencies in a big way. As per market experts, institutional investors are likely to invest in Bitcoins in the next few months.
Bitcoins as a hedge against inflation
Many institutional investors like JPMorgan, Goldman Sachs and Grayscale, have started using Bitcoins as a hedge against inflation. Not only that, they also believe that this can protect their assets that are held in fiat currencies as there is a risk of devaluation with various governments offering stimulus packages to deal with a slow economy. Other than that, there are many technical factors at play when it comes to institutional investors choosing Bitcoins. Some analysts predict that the price may hit $1 million by 2025.
Less risk and more reward potential
Even though the future growth of Bitcoin is debatable, it is widely accepted that there is less risk in having Bitcoins at this stage. On the other hand, the reward potential is huge, and it can easily hit $100,000 in the next one year if demand spikes up from all corners. Analysts believe that there is more risk in not having any exposure to Bitcoins and other digital investments.
The borderless network of Bitcoin
One of the primary aspects of Bitcoin that attracts every investor is the borderless network of the currency and the blockchain technology. This is not related with any other asset class, and it serves as a good tool for diversification in the long run. It is also secure when it comes to cross-border transactions, and it can be done quickly without any hassles.
The innovative features of Bitcoin that include smart contracts and low payment fees, and secure transactions make it an attractive option for many international traders. This can take us to a stage where all the transactions can be done in digital format, and we can move away from the regular paper-based economy.
As inflation is becoming a big risk globally due to various economic factors, institutional investors find comfort in crypto assets like BTC. This is a good hedging tool that can offer good growth in the long run.