How company bets on bitcoin can backfire

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The year-end plunge in cryptocurrencies has rattled companies that had bet heavily on bitcoin, sending share prices tumbling and reviving fears of a bubble.

Below AFP explains what happens to these bitcoin-buying firms when prices drop.

Why accumulate bitcoin?

Bitcoin surged this year, reaching a record above $126,000 in October.

Companies began buying and holding bitcoin to diversify their cash reserves, protect against inflation or attract investors chasing high returns.

Some were already linked to the cryptocurrency, such as exchanges or “mining” firms…



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We strive to uphold the highest ethical standards in all of our reporting and coverage. We StartupNews.fyi want to be transparent with our readers about any potential conflicts of interest that may arise in our work. It’s possible that some of the investors we feature may have connections to other businesses, including competitors or companies we write about. However, we want to assure our readers that this will not have any impact on the integrity or impartiality of our reporting. We are committed to delivering accurate, unbiased news and information to our audience, and we will continue to uphold our ethics and principles in all of our work. Thank you for your trust and support.

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How company bets on bitcoin can backfire



The year-end plunge in cryptocurrencies has rattled companies that had bet heavily on bitcoin, sending share prices tumbling and reviving fears of a bubble.

Below AFP explains what happens to these bitcoin-buying firms when prices drop.

Why accumulate bitcoin?

Bitcoin surged this year, reaching a record above $126,000 in October.

Companies began buying and holding bitcoin to diversify their cash reserves, protect against inflation or attract investors chasing high returns.

Some were already linked to the cryptocurrency, such as exchanges or “mining” firms…



Source link

Disclaimer

We strive to uphold the highest ethical standards in all of our reporting and coverage. We StartupNews.fyi want to be transparent with our readers about any potential conflicts of interest that may arise in our work. It’s possible that some of the investors we feature may have connections to other businesses, including competitors or companies we write about. However, we want to assure our readers that this will not have any impact on the integrity or impartiality of our reporting. We are committed to delivering accurate, unbiased news and information to our audience, and we will continue to uphold our ethics and principles in all of our work. Thank you for your trust and support.

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