Reflecting on recent developments, there is a strong case for Bitcoin Layer 2 organizations to consider incorporating bitcoin into their treasuries. This seemingly straightforward decision can yield significant benefits.
This sentiment is echoed by others as well, indicating a growing recognition of the advantages involved.
Observing the evolution of this sector, it becomes clear why Bitcoin Layer 2 entities should heed this advice. The emergence of programmable features within Bitcoin Layer 2s is transforming bitcoin from a “digital rock” into a versatile asset with added functionalities like smart contracts and scalability solutions.
Despite raising substantial funds from venture capitalists and investors, a significant portion tends to remain in fiat currencies. This practice can be detrimental considering the depreciating nature of fiat currencies, especially due to inflation.
Conversely, bitcoin has demonstrated a remarkable Compound Annual Growth Rate (CAGR) of approximately 70%, making it a compelling alternative for treasuries. By holding bitcoin instead of fiat, these organizations could significantly augment their capital resources.
Envision the possibilities of having resources growing by 70% annually to support development initiatives and projects. This strategic advantage could be pivotal in cultivating a robust Layer 2 ecosystem.
While acknowledging the volatility associated with bitcoin, it is prudent for these organizations to maintain a portion of their treasury in fiat for stability. However, relocating a substantial portion into bitcoin could potentially multiply their resources over time, fostering sustained success.
Historical examples, such as EOS, highlight the potential benefits of holding bitcoin. By making strategic investments, these organizations can leverage the exponential growth potential of bitcoin to enhance their ecosystem.
Ultimately, given their commitment to the Bitcoin platform, it is logical for these organizations to integrate bitcoin into their treasuries. As the premier store of value, bitcoin offers unparalleled advantages. Therefore, transitioning from depreciating fiat to holding bitcoin is not just a prudent decision—it is a strategic imperative.
This article represents a Take. The views expressed are solely those of the author and may not necessarily align with BTC Inc or Bitcoin Magazine.
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