Bitcoin has drawn the attention of Wall Street and Silicon Valley in the past few months. MicroStrategy MSTR and Square SQ are among the companies that high-profile investors have joined to name Bitcoin as an inflation hedge.
Bitcoin price has risen almost 300% in the past 12 months. It surpassed its 2017 highs of $ 20,000 in December and rose to over $ 40,000 earlier this month before declining slightly. Central banks around the world have got their money printing machines going again.
Now, Cathie Wood, the executive director of a prominent electric car maker Tesla TSLA investor, said Ark Investment Management, she thinks more companies will include Bitcoin on their balance sheets before speaking with a highly anticipated “Bitcoin” virtual corporate strategy “summit.
The recent Bitcoin price boom has sparked renewed interest in Bitcoin on Wall Street and Wall Street … [+]
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“I think we’ll hear from more companies that put this protection in place [bitcoin] on their balance sheet … especially tech companies who understand and are familiar with the technology, “Wood said in a recent interview published on Yahoo Finance, adding,” I believe there is no better hedge against inflation than Bitcoin. “
Wood also announced that big corporations are asking them if putting large sums of money into Bitcoin or other cryptocurrencies is a good idea.
In May last year, billionaire hedge fund manager Paul Tudor Jones named Bitcoin the “fastest horse” in the inflation race and sparked a surge of institutional interest in Bitcoin as investors grapple with unprecedented government and Federal Reserve measures annoyed that could undermine the dollar.
In August, the Nasdaq NDAQ-listed business intelligence company MicroStrategy started buying Bitcoin – and has not stopped since then. In December, Elon Musk, CEO of Tesla who has long flirted with Bitcoin and cryptocurrencies, asked Michael Saylor, CEO of MicroStrategy, about adding Bitcoin to corporate balance sheets via Twitter – which sparked wild speculation that Musk might switch Tesla’s reserves to Bitcoin .
Elsewhere, Square, the payments company run by bitcoin attorney and Twitter TWTR managing director Jack Dorsey, bought $ 50 million worth of bitcoin in October.
Ark researchers found that if large U.S. companies replaced some of the money, the price of Bitcoin could go up … [+]
Following Wood’s comments, Ark released its annual research report which found that “if all S&P 500 companies were to spend 1% of their cash on Bitcoin, the price could go up by approximately $ 40,000”.
“Square and Microstrategy, both with on-balance sheet investments in Bitcoin, are showing public corporations the way to use Bitcoin as a legitimate alternative to cash,” wrote the Ark research team.
The team also reiterated their prediction that the total value of Bitcoin will increase between $ 1 trillion and $ 5 trillion over the next five to ten years – up from $ 600 billion today.