Bitcoin has been in existence for over 15 years, and an increasing number of companies and brands now accept it as a form of payment. However, for most people, paying with Bitcoin is as unfamiliar as paying with galactic credits. In fact, Bitcoin is not currently suitable for buying a cup of coffee. But it may be funding a company that can change your life, which is why we need to give it some room to be used.
By design, Bitcoin is scarce, making it a reliable store of value, so people want to be allowed to use it. While its use in everyday transactions, such as buying coffee, is decreasing, its popularity as a medium of exchange in other aspects is increasing. For example, funds, venture capitalists, and angel investors are strategically investing in startups. We know this because we see more and more startups seeking service providers that offer Bitcoin-to-fiat currency exchanges to conduct their business, such as paying salaries and office rent.
We also see large institutional investors purchasing Bitcoin as an alternative investment to diversify their portfolios and seek returns against market volatility. Of course, we have also seen the popularity of recently approved Bitcoin exchange-traded funds (ETFs), with BlackRock becoming one of the largest Bitcoin buyers ever. As of May 2024, BlackRock’s iShares Bitcoin Trust has accumulated over 274,000 Bitcoins, worth about $16 billion at the time of writing.
For these reasons, Bitcoin is now clearly seen as a viable investment opportunity for major players. However, in turn, it is time to worry about the possibility of large participants monopolizing the market and causing harm to companies, founders, and investors who still prefer to use Bitcoin as a medium of exchange.
The control of Bitcoin by organizations like BlackRock (to fill their ETFs) threatens Bitcoin adoption because it limits the circulating supply of Bitcoin. At the same time, the price increase driven by these institutions makes Bitcoin a more attractive investment asset. This is the dilemma of Bitcoin and has raised real concerns.
As more companies include Bitcoin on their balance sheets, they need to trade and exchange within a more liquid ecosystem. ETFs, on the other hand, are designed not to “release” their Bitcoin. So, what will happen next?
The only practical answer is regulation. Not to relax regulations on Bitcoin ETFs themselves, but to support regulatory approvals for more financial products that utilize the value of Bitcoin, making ETFs no longer the only choice. Approving financial products that utilize other digital assets (such as the upcoming decision on Ethereum ETFs) can also alleviate the buying pressure on ETFs. Additionally, permitting and approving more payment and exchange channels between fiat currencies and Bitcoin (so that acquiring Bitcoin is not solely through brokers) can help bring more Bitcoin back into the market.
In the Web3 ecosystem, more and more investors are using cryptocurrency-backed assets to support promising startups. Many outstanding projects and initiatives have already received funding through Bitcoin or other stablecoins, and we will see more similar projects in the future.
But to achieve this, we need to ensure that there is enough Bitcoin liquidity in the market. This requires more financial products with different purchasing models and support for different digital currencies, as well as more exchange mediums to allow investors and companies that fund companies with Bitcoin to continue to grow.
Most importantly, companies like BlackRock should support this plan. If their Bitcoin ETF is any indication, the demand for cryptocurrency investment products will only grow.
Tags:
2023 market trend
ETF
Ethereum
store of value
Bitcoin
Bitcoin ETF
BlackRock
Source link:
https://www.hellobtc.com/kp/du/05/5182.html
Note: The views expressed in this article do not constitute investment advice.
Original article link:
https://www.bitpush.news/articles/6720116
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