Why do large companies invest in bitcoin?

There are many investment instruments on the financial market, among which cryptocurrency stands apart. Digital assets appeared not so long ago, but due to their features, they managed to attract the attention of many large businessmen.

Short answer: to save your assets from inflation and make money.

Now for the extended answer. To begin with, we recall that the emission of bitcoin is limited. A total of 21 million coins will be issued. Many believe that the limited supply, "seasoned" with halvings - halving the rate of BTC inflow into the market - makes bitcoin a deflationary asset.

The issue of fiat currencies, on the contrary, is not limited. The launch of a “printing press” by financial regulators can devalue traditional money. At the same time, the owners of the fiat cannot influence the situation in any way.

For example, 80% of the dollars that circulate in the market were printed between January 2020 and October 2021. The issuance of such a volume of currency in 2022 was followed by a series of key rate increases aimed at combating accelerated inflation. In order not to aggravate the situation, the US stopped the printing press. At the same time, in March 2023, against the backdrop of the collapse of Silicon Valley Bank, it had to be temporarily launched again in order to “shut up” the growing crisis with money.

As of the time of this review, the US Fed does not know when the process of raising the key rate will be completed. Rising rates make loans more expensive and slow the economy. Therefore, this approach to curbing inflation has "side effects".

With investments in other traditional financial instruments, everything is also not so simple. For example, the stock market largely depends on the decisions of US financial regulators. The hawkish policy of financial regulators puts pressure on the stock market. With the "currency of fear" - gold - not everything is going smoothly either. The precious metal is significantly inferior in terms of profitability to many alternative assets.

At a time when traditional financial instruments do not work well or do not work at all as a means to save savings and escape from inflation, investors are looking for alternatives. Many saw the solution to the problem in cryptocurrency and bitcoin in particular. For example, Tesla founder Elon Musk fights inflation with Bitcoin, Dogecoin and Ethereum.