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In the present times, the concept and use of cryptocurrencies have become very popular all around the world. Amongst the different types of digital currencies that are now known around the world, Bitcoin is the most popular digital currency. Introduced in 2009 by a person going by the alias Satoshi Nakamoto, Bitcoin has made the headlines in recent years.

Bitcoin benefits

The advantages associated with the use of digital currency such as Bitcoin are what makes it so popular and appealing to a large percentage of the global population. Bitcoin enables people to receive and send money without the involvement of an intermediary financial institution such as a bank, in a cost-effective manner. Owing to Blockchain technology, which is what regulates the usage of Bitcoin, transaction traceability is possible. This means that all transactions are recorded in the unique blockchain database while the user’s anonymity is maintained.


Bitcoin for foreign direct investment

 From perusing through the advantages of using Bitcoin for your transactions, it may be said that Bitcoin has the potential to reshape the financial system in underdeveloped or developing countries with inefficient and unreliable banking systems. While this may be true, Bitcoins are also leaving a mark in developed countries. So, how and why are bitcoin transactions increasing in developed countries?

A lot of companies have been raising funds through ICOs (initial coin offerings). ICOs are associated with Bitcoin. These companies are trying to acquire funds for capital from foreign investors through initial coin offerings. This capital will be utilized for projects that are US-based.


More on ICOs for foreign direct investment

 You might be wondering how are initial coin offerings connected to foreign direct investment. To put it simply, businesses that are in the early stage of development, need to have adequate capital, in the form of funds, to function. These companies are looking for investors from all over the world, to invest in these companies. For this purpose, they are using ICOs.

Investors can use Bitcoins or dollars or other types of currency to invest in these companies. For the amount they invest in the form of bitcoins through the, these investors receive tokens or coins. These coins or tokens represent the digital asset that the investor receives for investing in a foreign company. Therefore, investors have the freedom to invest in foreign companies through Bitcoin.


IPO versus ICO

 When you choose to invest in companies that are selling their shares and making them available to the public for purchasing the same, the process is quite complex. Investment banks are responsible for underwriting as well as listing the shares on various stock exchanges.

ICOs differ from IPOs in a few notable ways. There is no involvement of an intermediary body such as investment banks for approving or listing the shares of the companies that opt for ICOs. There are multiple significant benefits of venturing into foreign direct investment companies through ICOs. These advantages have been stated as follows:


  • One of the primary advantages of investing in these foreign companies through bitcoins is the direct nature of the investment. Investors don’t need any permission or involvement from an intermediary body to execute these investment plans. Intermediary bodies will charge money in the form of fees for their services in facilitating these transactions. Through ICOs, investors can directly invest in foreign companies and acquire a digital asset in the form of coins or tokens.
  • Secondly, as an investor, you expect your investment to be successful. By investing in foreign companies through ICOs, owing to the rising value of Bitcoins, your investment returns can be significantly higher in comparison to investing in IPOs. Therefore, the probability of securing profitable returns is higher through ICOs than IPOs.
  • Another advantage of owning digital assets in the form of tokens or coins for investing in foreign companies through foreign direct investment is the fact that ICO is not heavily regulated by a third party. IPOs are heavily controlled by the regulations set by regulatory bodies and have to adhere to a lot of stringent terms and conditions for selling their shares. ICOs are free from such regulations.


The aforementioned points highlight how bitcoin can help you with foreign direct investment ventures.