Why Bitcoin is becoming the asset of choice for hedge funds and billionaires
High-net-worth individuals including Ray Dalio and Thomas Peterffy who have previously criticised BTC have recently invested in the digital asset.
- Bitcoin's market dominance has slipped to a relative low of 37% over the past week.
- Chinese BTC mining hardware manufacturer Canaan Inc. has expanded its business footprint into Kazakhstan by deploying over 10,000 miners across the region.
- The total BTC accrued by publicly listed companies grew quite significantly over the course of 2021, as per reports.
Bitcoin, the world's largest cryptocurrency by total market capitalisation, has had a rough start to the new year, having registered losses of nearly 6% over the last 14-day stretch. Price-wise, the flagship crypto has stayed completely range-bound between AUD$63,000 and $67,000 since 1 January, indicating more losses may be incoming in the near term. At press time, BTC is trading at a price point of AUD$64,192.
Despite these alarming numbers, reports show that the number of billionaires across the globe who have continued to accrue crypto – primarily BTC – has increased substantially, especially as fears of inflation continue to loom large on the horizon.
Even previously vocal anti-crypto proponents such as Hungarian-born business magnate Thomas Peterffy (whose net worth is touted to be in excess of US$25 billion) have recently turned to digital currencies. In a recent interview, he was quoted as saying that investors should have at least "2–3% of their portfolios" in crypto assets.
Despite not revealing the exact amount of his crypto investments, Peterffy noted that there is a possibility that digital currencies can reap extraordinary returns for their owners, adding: "I think it can go to zero, and I think it can go to a million dollars. I have no idea."
Similarly, Bridgewater Associates founder Ray Dalio, who has previously questioned Bitcoin's value as a tangible long-term store of value (SOV), recently stated that his portfolio now contains both BTC and ETH. Lastly, billionaire hedge fund manager Paul Tudor Jones also revealed during Q4 2021 that he had added Bitcoin to his portfolio, citing inflation as the key driver behind his investment decision.
China's BTC mining ban has been a blessing in disguise for Kazakhstan
Ever since China initiated a nationwide crackdown on its local crypto mining sector late last year, a number of neighboring countries have helped fill the void by offering miners both cheap fuel and an extremely welcoming business development environment.
In this regard, one of the world's largest Bitcoin mining hardware manufacturers Canaan Inc. has successfully expanded its activities into the Central Asian country of Kazakhstan after having entered into various strategic partnerships with mining firms operating within the region. The Nasdaq-listed firm revealed recently that it has been able to deploy more than 10,000 AvalonMiner units across the nation over the last few months.
BTC accumulation by large corporations grew majorly last year
According to on-chain analyst Willy Woo, the number of publicly traded firms holding Bitcoin has increased significantly over the last 12 months. This major surge can in large part be attributed to the release of BTC ETFs last year. Some of the leaders in this regard were Grayscale and Michael Saylor-led MicroStrategy.
Disclosure: The author owns a range of cryptocurrencies at the time of writing.