Bitcoins and blockchains have attracted a lot of attention in recent years, as their popularity and value has increased significantly. With this attention, venture capital investors have noticed that there is opportunity for them to get involved as well. Financial experts and analysts alike have all agreed that bitcoins will indeed be the wave of the financial future. As more industries are gaining acceptance to converting and accepting bitcoins, this has created an interesting opportunity for investors and venture capital investors to invest in the financial sector of bitcoins.
Big Bitcoin Wallets: Venture Capital Investors
But this investment does not come with risks or cautions, as the fluctuation of bitcoins has also caught a lot of attention in recent years. But even more so, there has been a large amount of investments in the bitcoins industry by multi-million dollar corporations with all seen the vision of what is to come about of bitcoins. These investors have big pockets, and big money for the industry. That venture capital investors have shown great interest in investing in the financial technology, but they have also proceeded with caution.
One of the first things that venture capitalist who plan to make bitcoin wallet investments must remember: when investing in the bitcoin market, the market is a bigger beast than it appears from the outside. While bitcoins may not be the singular currency accepted in any one particular country, it has earned a high amount of respect globally that takes away the urgency of the bitcoins network for venture capital investors.
That means that venture capital investors should not be aggressive with their investments as they would with stocks bonds or other investment vehicles, as the bitcoins market is already saturated with investors. bitcoins will continue to exist long after Eventual is have interest or profit from their investments, so it is best to remain humble and to look for opportunities that are mutually beneficial as opposed to heavy for the investor.
Bitcoin Blockchain’s Ease of Use
Secondly, venture capitalist need to remember that the currency is easy to use. The public accessible blockchain records every bitcoin wallet transaction here that has ever been broadcast. There is no need to assume that there are complicated measures into understanding bitcoins. Nor are there layers of regulatory systems that can make the process of utilizing bitcoins difficult or confusing. BTC is straightforward, as they have value that has been established and is measured against other forms of currency such as the American dollar and the European Euro.
BTC Startups are Forming
Another thing to note is that investing and bitcoins startups is not the most profitable avenue to pursue as it once was. Even though the bitcoins marketplace is projected to produce more than $21 million worth of bitcoins before the year 2040, the age of investing in the startups has already passed. Approximately 30% of all bitcoins have already been produced, leaving the better half of bitcoins left to be discovered and unlock.
But that does not present an overwhelming investment opportunity for venture capital investors, as there are thousands of miners who are working every day towards unlocking additional bitcoins. That is not up a proprietary business to invest and, therefore venture capital investors should lean more towards innovative and revolutionary ideas that may alter the course of bitcoins as opposed to further the course that it currently is partaking.
Venture capital investors do also need to keep in mind that the fluctuation of the value of bitcoins presents an awesome opportunity to increase the value of their money while fighting against inflation. Even a task as simple as converting American money into bitcoins and allowing the currency to sit in the bitcoins wallets as the fluctuation continues over time is a great way of protecting the value of the American dollar. As inflation causes the American dollar to decrease in value and power, bitcoins have steadily increased in value, at one point starting off as a fraction of a penny against the American dollar and then steadily multiplying to the points that a fraction of a bitcoins is worth a single American dollar.
This presents an opportunity for capital interests to invest in global markets through a singular recognized currency. Having this ability to convert your money also allows the value of the money converted to increase in value like the way venture capitalist may invests in the stock market. Since profits are made as the sales price of a stock is greater than the purchase price of that stock, bitcoins work in a similar way. By purchasing BTC when they are at their lowest value, buyers get a great deal. Hold onto them and till the value of the individual bitcoins have exponentially increased. Big investors can find multiple ways to generate sources of income, by which the increase in the value of their investments is one of them.
One of the final things that venture capital investors must keep in mind regarding bitcoins is that they are at risk to theft. Because they exist only in an online realm and cannot be physically held in your hand like American money, hackers have routinely penetrated bitcoins accounts, stolen the currency and gotten away without a trace. This poses a danger for venture capital investors who intend on converting their money and letting it sit for long periods of time, as their money may be at risk of being stolen or just plain disappearing by the work of a scrupulous thief.
This also poses the threat of to the actual value of the money, as its valuation fluctuates every time there is a heist. This means that even though bitcoins are promising in terms of increasing in value, there are instances in which the bitcoins value can decrease, causing the venture capital investors to take a loss. This poses a problem for them, as they may seek to invest in startups or companies with bitcoins only to find out that the value has decreased and additional funds would have to be added to that currency to execute the investment, but that would also mean that the actual investment will not pay back the percentage originally projected due to the additional investment required which decreases the profit.
Venture capitalist have found that bitcoins are attractive, noteworthy and presents interesting investment opportunities that have never been available before now. If bitcoins exists, venture capital investors will find even more ways to creatively utilize bitcoins to create profitable endeavors. Nonetheless, taking heed to word of caution can prevents investments from failing, or even worst, working against the investor.