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Why do investors keep their interest in cryptocurrency?

interest in cryptocurrency

Why do investors keep their interest in cryptocurrency?

Is interest in cryptocurrency still keeping by investors? Despite the uncertainty in the crypto market, financial corporations continue to add digital assets to their investment portfolios, and large players remain optimistic.

The B-Word conference, which took place on July 21, brought together three major crypto investors: Tesla and SpaceX founders Elon Musk, CEO of payment company Square and founder of Twitter Jack Dorsey, and head of ARK Investments investment fund Katie Wood. Tesla owns 48,000 bitcoins, Square has 8,000 digital coins, and Ark Investment is actively investing in Grayscale’s GBTC fund.

Square can be called one of the key payment services for the widespread adoption of Bitcoin. The platform not only allows its customers to buy cryptocurrency, just like PayPal but also prepares to give them access to Decentralized Financial Services (DeFi). A special platform will be created for this.

During the conference, Elon Musk said that Bitcoin is owned not only by Tesla but also by his other company, SpaceX. Speaking about his personal investments in cryptocurrencies, Musk said that he made most of it in bitcoin, and also confirmed that he owns some Ethereum and Dogecoin.

CEO Tesla expressed his position on the prospects for the Lightning Network and noted that everyone should have private keys from wallets with their own cryptocurrency. The billionaire promised that Tesla will start accepting payments in bitcoins again if it is confirmed that more than 50% of the first cryptocurrency is mined from renewable energy sources. Musk also called it “a very good idea” to transfer bank deposits to bitcoin, since they have negative rates in Europe.

ARK Invest CEO Katie Wood highlighted two important benefits of Bitcoin. First, bitcoin, which has no inflation, is a good hedge against inflationary risks, Wood said. On the other hand, in her opinion, bitcoin will be more environmentally friendly than the modern financial sector. Wood drew attention to the social significance of bitcoin: the ability to use it without access to banking and the transparency that blockchain provides.

Square and Twitter CEO Jack Dorsey said Bitcoin will play an important role in the future of Twitter, and the company plans to integrate the first cryptocurrency into most of its services. Dorsey also noted that he was inspired by the bitcoin crypto community and compared the cryptocurrency to “the early period in the history of the Internet” and promised to open the source code of Square’s software and hardware that works with the digital coin to everyone.

The main message of the conference can be characterized by a quote from Elon Musk:

interest in cryptocurrency

Banks and financial corporations

The position of crypto investors such as Musk is also supported by large financial institutions, especially from the United States. They have made great strides in the adoption of cryptocurrencies in recent weeks. On July 22, JPMorgan became the first major American bank to enable its clients to work with cryptocurrency funds. The bank became the first major financial institution in the United States to provide all of its clients with the opportunity to transact with cryptocurrencies.

At the same time, Goldman Sachs published the results of a survey of family offices. According to the bank, 15% of them are already investing in cryptocurrencies, and another 45% are planning to hedge their risks using digital assets.

Institutional and DeFi

Another important point of possible interest for institutional investors is decentralized finance. One of the largest DeFi projects, the Aave Landing Protocol will launch the Aave Pro protocol for institutional investors, which can only be used by legal entities that undergo KYC and AML procedures on the platform. Aave Pro will work with the following assets: USDC, BTC, ETH, and AAVE.

Banks outside the United States also support interest in DeFi. For example, the Commercial Bank of Siam (Thailand) announced its desire to invest in DeFi and decentralized finance on July 24. He plans to invest $ 110 million in DeFi and blockchain, which is half of the financial institution’s total venture capital fund.

What’s next?

First of all, an active interest in bitcoin is maintained among institutional investors in the United States. So says Galaxy Digital founder Mike Novogratz. Galaxy Digital is one of the oldest crypto funds, with which the largest American banks enter into partnership agreements to gain access to crypto assets.

The United States is considered the country that sets investment trends in the world. Therefore, recognition from American institutional investors, large corporations, funds, and banks is a good sign for the dynamics of the cryptocurrency market. Ultimately, many institutional investors believe in the basic characteristics of bitcoin that Cathy Wood spoke of – bitcoin has almost no inflation, so they expect the market to grow in the long term.

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Disclaimer: Bitxmi News is a news portal and does not provide any financial advice. Bitxmi's role is to inform the cryptocurrency and blockchain community about what's going on in this space. Please do your own due diligence before making any investment. Bitxmi News won't be responsible for any loss of funds.

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