Twitter’s CFO has called investing in cryptocurrencies now pointless. Why?
Twitter CFO Ned Segal said that investing in cryptocurrencies right now is very risky and “too illogical”. The problem is the very high volatility of the crypto market and the lack of regulatory infrastructure in its proper form. Segal noted that for Twitter to invest in cryptocurrency the company would have to change its current investment policy, which currently only allows it to hold relatively stable securities-type assets on its balance sheet. We tell you more about what’s happening.
Note that the CEO of Twitter is Jack Dorsey. He is an active supporter of the digital asset industry and has a particular focus on Bitcoin.
In particular, earlier Jack even announced his desire to create a new generation of miners for BTC, which was to allow a huge number of people to join the mining of coins. The main goal in this case will be to lower the entry threshold to the mining niche. Well, thanks to this, the network of the main cryptocurrency will prove to be more decentralized.
What’s wrong with cryptocurrencies?
Segal’s opinion is radically different from Twitter CEO Jack Dorsey, who has been an active fan of the crypto market for several years now. His other company, Square, is already investing tens of millions of dollars in Bitcoin, but hasn’t really invested a dime in BTC on Twitter’s behalf yet, Decrypt reports.
Twitter’s CFO Ned Segal
We checked the current data: Square holds 8,027 bitcoins. According to Coingecko, the company has invested $220 million in the cryptocurrency, but it is now valued at $479 million. This stock puts Square in fourth place in the overall ranking of public companies in terms of BTC savings.
Ranking public companies by volume of Bitcoin savings
Does Segal’s point of view have enough merit? Undoubtedly, the cryptosphere has been and remains a very volatile industry, that is, very sharp in terms of rate movements. Its capitalisation has risen and fallen by hundreds of billions of dollars over the course of this year. And in such an environment, it is indeed very dangerous to invest large capital in a large company – especially if one has no experience with digital assets.
Crypto market capitalisation trends since the beginning of this year
Bitcoin is now also reminding of its volatility: this morning, the cryptocurrency is balancing at $59.6 thousand, with BTC jumping above $66 thousand back on Monday.
Bitcoin’s hourly chart
That fact isn’t stopping other big players in the financial world, though. MicroStrategy, for example, has been actively buying bitcoins since last year and in all that time has built up its cryptocurrency wealth to several billion dollars. CEO Michael Saylor has repeatedly said that he is willing to keep BTC on his organization’s books for at least a century because he believes in the enormous potential of cryptocurrencies.
He has even noted that current digital asset purchases are being made for the next generation. If you follow the logic of Saylor's words, MicroStrategy has no plans to sell its coins in general - though the point of such an investment seems unclear.
Incidentally, the world’s largest cryptocurrency exchange, Binance, is already among the de facto ranks of giants. According to a recent Wall Street Journal study, Binance could be worth as much as $300 billion. If the exchange went public right now with such figures, it would rank 25th in the world by the aforementioned figure.
Just imagine: Binance could very well rank among brands like Adobe, Disney and Netflix. The platform’s average daily spot trading volume is already above $30 billion, with daily crypto derivatives transactions of the familiar futures type reaching $80 billion, according to CryptoSlate.
Top 5 crypto exchanges
Unfortunately, Binance’s IPO is still a distant event in the uncertain future. The exchange is full of problems with financial regulators, whose main complaint is the decentralisation of the company itself. It has no head office and no registered address. All this significantly complicates the process of monitoring Binance and so far makes an IPO virtually impossible. However, the management of the exchange is now working hard to improve its reputation in the eyes of regulators.
We believe that Twitter's CFO's remark is relevant in the present times, but misleading on a large scale. Still, exactly one year ago the same Bitcoin was worth $17.6 thousand, while today it is valued at nearly $60 thousand. And all this is taking into account numerous collapses and sharp growth phases. So in essence, volatility will only be a problem for those investors who don't believe in blockchain technology and can't recognize the onset of a market decline. Others will surely be able to profit from the rise of the coin.
Look for even more interesting things in our cryptochat. There we will talk about other topics that affect the cryptocurrency and blockchain industry.
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