05.03.2024

Should a small business invest in Bitcoin?

Over the past year, numerous large corporations and institutions have entered the cryptocurrency industry, making significant BTC purchases worth billions of dollars.

Since some of these companies were giants like Tesla, MicroStrategy, Ruffer Investment, and MassMutual, it’s only natural that they all made repeated headlines. But what about the so-called small market players? What was the experience of investing in cryptocurrency for them?

Since BTC is considered a highly volatile and risky asset with a little over a decade of history, it is not a preferred asset for small businesses that risk taking too much risk. However, this claim does not seem to apply to Sam Greg’s Pizzeria / Gelateria, a small pizzeria owned by a couple in Alabama, USA.

Co-owner Greg Hathorn recently shared details of his firm’s investment in Bitcoin with reporters at news outlet CryptoPotato. And although his investments look very small compared to the investments of large corporations – it is 200 thousand dollars – for his business it is a lot of money. Here’s what the Hathorn family thinks about crypto industry trends and the earning potential of digital assets.

Why buy Bitcoin?

Perhaps the most important question for every new investor is why he or she decided to invest in a particular asset. Greg shared his past in information technology as well as his new career as a restaurateur.

He noted that cryptocurrencies and blockchain technology have been in his field of vision for quite some time. He is confident that digital assets will continue to evolve and become an excellent alternative to the traditional financial sphere . Here is a quote in which an entrepreneur shared his point of view on this topic.

So why exactly is Bitcoin for my business? The answer is simple: I’ve worked hard to save money, and I don’t like it when it’s not respected and devalued. I also disapprove that politicians and central banks reduce the value of the American worker to the speed of a printer by issuing dollars. Bitcoin solves these problems. The simple forces of fixed supply and unlimited demand operate at play, making Bitcoin the obvious choice as a store of value for those who simply need a store of value, no matter the size of the business.

That is, the entrepreneur is not satisfied with the situation that has developed due to the actions of the governments of different countries. Let us recall that many of them began to solve the problem by issuing new money for distribution to certain layers of citizens. In the long term, due to the large scale of activity, this can reduce the value of the currency – hence Greg’s statement about the depreciation.

pizzeria photo pizza

Greg with his family in front of a pizzeria

Greg said that the events of spring 2020 were the catalyst for his decision – a rather decisive moment for the cryptocurrency industry, as well as the entire financial sector. The COVID-19 outbreak was then only recognized as a global pandemic, and its consequences spread to all financial markets, causing a sharp drop. Bitcoin was no exception, as it plunged 50 percent on the day to below $ 4,000 on March 12, 2020 .

Bitcoin chart cryptocurrency trading

Bitcoin price growth over the past year

However, later on, BTC did not stop at a simple recovery and reached new highs in the next eleven months. Unsurprisingly, the Hathorns’ investment in the crypto market has grown by about 350 percent since they started investing in April last year.

According to the owner of the institution, he prefers to invest in trusts of the investment fund Grayscale. Thus, he does not need to worry about the storage of cryptocurrency, the safety of private keys and everything in this spirit. Instead, he owns a portion of the Bitcoin Trust and can capitalize on the movement of the cryptocurrency price while avoiding the aforementioned risks.

Recall that a private key is a unique combination of letters and numbers that allows you to access the contents of a cryptocurrency address. If an outsider takes possession of this combination, he will be able to dispose of the coins and send them to his wallet. Therefore, you need to store private keys and seed phrases as responsibly as possible. You cannot communicate them to other people or enter secret combinations on any website.

pizzeria photo pizza bitcoin

By the way, for the cryptocurrency industry, pizza has almost sacred significance – 10 years ago, the first purchase of a real product – two pizzas – for 10 thousand BTC was made.

While this is still not common practice among large and small businesses, Greg believes that every owner or executive should «at least learn Bitcoin» before making a conscious decision about whether to buy or not buy cryptocurrency. Here is his line.

Bitcoin and cryptocurrencies in general are not going anywhere, so it should not be ignored as a temporary phenomenon that will supposedly disappear.

While acknowledging the increased volatility of the asset, Greg does not consider it risky, «or at least no more risky than investing in stocks, market ETFs or just cash.» It is ready for short-term volatility, cryptocurrency price spikes, or even short-term correction. Moreover, the owner of the pizzeria is determined to maintain his position in Bitcoin for the long-term.

Such successes in the form of hundreds of percent of profitability happen quite often in the cryptocurrency industry. For example, against the backdrop of the recent rise in BTC above $ 61,000, Tesla’s $ 1.5 billion investment in the coin has already brought the company more than thirteen years of car sales.

tesla auto pay

Render of the Tesla car payment page in bitcoins

We believe that Greg deserves the profitability he has already earned. Still, the entrepreneur was not afraid to contact a new asset class and a rather risky investment, after which he began to invest in BTC. This confirms the progressiveness of his thinking and ability to save money. Hopefully, this is not the end of his cryptocurrency journey.

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