SAN ANTONIO — Bitcoin remains the king of cryptocurrencies. As more companies adopt the digital asset, you’re likely investing in this new kind of money without actually owning it. Here’s why.
A growing number of businesses are embracing bitcoin. Several major companies that are scooping up the cryptocurrency include Tesla, MicroStrategy, and Square. Other popular companies accepting bitcoin as a form of payment include Microsoft, AT&T, the Dallas Mavericks, and Overstock.
“What companies are choosing to do, some of them, they’re choosing to take part of their balance sheet that’s sitting in cash like their savings account and they’re choosing to put it into cryptocurrencies,” said Karl Eggerss, senior wealth advisor and partner of Covenant. “The reason they’re doing this I think is because they see the value of the dollar depreciating over time.”
As this form of currency becomes more widely accepted, Eggerss explains how people will be indirectly tied to it.
“The reason why is because you probably have mutual funds, your 401(k), your other savings that you’re doing and you have exchange-traded funds. When you own those mutual funds, those mutual funds own individual stocks and those companies are buying Bitcoin,” he said. “If you own a diversified stock mutual fund, you’re probably aren’t going to own a significant amount of cryptocurrency. I wouldn’t worry too much.”
If you welcome the indirect exposure and want to make further investments in companies that hold bitcoin, Eggerss says to consider the risks and proceed with caution.
“I would really look at what is the primary focus of the company in terms of what they’re trying to accomplish. Are they selling cars? Are they selling computers? Are they selling refrigerators? Whatever they are doing. That’s why you should invest in a company,” he said.
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