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Top line
Amid a pandemic that has seen the value of the US dollar, bitcoin’s price has exploded nearly 150% this year and 15% in the last week alone, sparking a wave of renewed attention from Wall Street as the pioneering cryptocurrency is approaching its all-time high price spike since late 2017 (before the cryptocurrency market collapsed).
Ray Dalio, founder of Bridgewater Associates, at Fox Business Network Studios in New York City. (Photo by … [+]
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Main aspects
JPMorgan president and billionaire CEO Chase Jamie Dimon, who sadly called bitcoin a fraud in 2017, said in a New York Times conference on Wednesday, said he “believes” in blockchain technology (JPMorgan has its own cryptocurrency) and ” properly supported, properly regulated “cryptocurrency, but that bitcoin is not its” cup of tea “and too many questions remain about its regulation.
But Bitcoin’s rebounding price prompted billionaire hedge fund manager Ray Dalio to question his own skepticism on Tuesday: “I might lose something on Bitcoin, so I’d love to be fair,” Dalio tweeted before launching into a slew of perceived dips, echoing much of Wall Street’s bearish sentiment.
As a medium of exchange, bitcoin is not yet widely accepted by traders, which Dalio postulates because of its volatility, something that also makes it “not very good as a store of wealth,” he added.
“Bitcoin made me an honest man in 2020,” said Jeffrey Gundlach, CEO of DoubleLine Capital, at Forbes’ Wealth Management Summit last week, publicizing his January forecast that prices would exceed $ 15,000 this year; in October he noticed that bitcoin was “a lie”.
He also said bitcoin rose in tandem with gold, a sign that investors are flocking to the cryptocurrency as a hedge against inflation.
DeVere Group’s $ 12 billion CEO Nigel Green agrees with this Wednesday in a statement, saying inflation fears spurred by massive government spending during the pandemic cause investors to “pile up in safe haven assets, especially those not tied to any specific country, such as Bitcoin and gold, as a shield against turbulence “.
Crucial quote
Many investors are now taking bitcoin as a “legitimate hedge against long-term inflation fears, which have come to the fore due to stimulus packages,” Green further noted Wednesday. “These emergency measures, such as the massive money printing agenda, reducing the value of traditional currencies such as the dollar, and other inherent characteristics of cryptocurrencies are also sparking interest,” he added, pointing to trends such as rising global trade. digitization and younger consumers who are more likely to embrace cryptocurrency.
Surprising fact
DeVere Group said Wednesday that 73% of the more than 700 of its millionaire customers who responded to the company’s annual cryptocurrency survey said they have already invested or will invest in cryptocurrencies by 2023, up from 68% last year. with the rebalancing of individuals with high net worth. their wallets to cryptocurrencies, Green said.
Key background
“Unlike gold, which is the third highest reserve asset owned by central banks, I can’t imagine central banks, large institutional investors, corporations or multinational corporations using [bitcoin], “Dalio tweeted on Tuesday, but past volatility – and the lack of day-to-day transferability – hasn’t stopped a group of institutional investors and corporations from at least getting close to bitcoin this year. Throughout the first half of 2020, more than 20 Financial institutions, with assets ranging from $ 10 million to more than $ 5 billion, revealed they own bitcoin through the Grayscale Bitcoin Trust, a publicly traded investment vehicle that owns bitcoin and tracks its price. Payment firm Square invested $ 50 million in bitcoin in order to diversify its largely USD-denominated balance sheet, becoming the last major institution investing large sums in the world’s first cryptocurrency.
What to watch for
Regulation. “My experience with the government is that they can regulate what they want, when they feel like it … and if [bitcoin] gets bigger and bigger, it will be regulated, “Dimon said Wednesday.” Around the world, it’s already starting to happen, “he added, possibly referring to tightened regulation in countries like South Korea, India and China, which prevents financial institutions from facilitating cryptocurrency transactions.. The SEC, meanwhile, has largely cracked down on crypto fundraising through “initial coin offerings,” but has been reluctant to provide insight into the industry as a whole, though that may soon change. “There is growing interest from a broad spectrum of people, both within the crypto space and within traditional financial institutions, asking us for guidance,” a SEC commissioner told CoinDesk last month. “I think we will be forced to face it more and more in the coming years.”
Big number
$ 19,783. This is the price bitcoin hit in late 2017 after climbing 15 times that year amid a wave of increased attention and growing mainstream adoption, as retailing has become easier through pioneering bitcoin platforms such as Coinbase brokerage. But that bubble proved unsustainable and bitcoin’s price plummeted 80% by the end of 2018. Bitcoin’s rise this year has driven prices to around 90% of peak levels.
Further reading
A major investor in Tesla has predicted that Bitcoin will be worth more than $ 1 trillion in less than 10 years (Forbes)
20 institutional investors in Bitcoin revealed, but the list may soon vanish (Forbes)
Square founded by a billionaire invests $ 50 million in Bitcoin, pushing stocks to all-time highs (Forbes)
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