Late on crypto? Institutions still at early stage of Bitcoin adoption

Institutional investors are seen to be rushing toward Bitcoin (BTC) at high speed, with more companies emerging that look to adopt Bitcoin as a way to store their reserves. Recently, Marathon Patent Group, a Nevada-based Bitcoin mining company, has bought $150 million worth of Bitcoin as a reserve asset, a move similar to MicroStrategy purchasing $425 million worth of Bitcoin in September 2020. This purchase made Marathon Patent Group the third-largest holder of BTC among publicly traded companies

In addition to Marathon, BlackRock, the world’s largest asset manager by virtue of assets under management, has stated in its new filings to the United States Securities and Exchange Commission that Bitcoin derivatives now could be a part of the investment schemes of two of its associate funds, BlackRock Global Allocation Fund Inc. and BlackRock Funds. This is bound to set a precedent for other large asset management companies, such as Vanguard, UBS Group, State Street Advisors, etc., to enter into the domain of crypto investments.

According to research done by technology researcher Kevin Rooke, publicly traded companies now hold over $3.6 billion worth of Bitcoin, which is a 400% increase within the last 12 months. In 2019, these companies barely had 20,000 BTC in their portfolios, a number that has now jumped to 105,837 BTC, with the biggest holders being MicroStrategy, Galaxy Digital and Marathon Patent Group. Institutions are now getting involved in the Bitcoin market as some are expecting Bitcoin to become a digital alternative to gold.

2020 BTC bull run brings FOMO to institutional investors

The price of Bitcoin has jumped from around the $7,250 mark at the start of 2020 to its all-time high of $41,940 on Jan. 9 this year. This jump entailed that investors got a 303% return on their investment in Bitcoin over 2020. These returns surpassed the returns of market indicators such as S&P 500, Nasdaq Composite Index and gold by a significant margin.

These abnormally high…

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