Wall Street is warming up to Bitcoin. Big banks and financial firms are showing signs of the growing acceptance of cryptocurrency. Meanwhile, Bitcoin is aiming for the stars as it begins flirting with a $50,000 value for the first time ever. In fact, prices gained by 40% in February. What’s happening here?
Bitcoin Continues to Rise
The digital asset continues its meteoric rise in 2021. It started the new year at $29,388 but is now hovering in the $48,250 range. In between its $20k rise are a number of big-ticket adopters who began warming up to Bitcoin. This includes EV maker Tesla who announced a $1.5 billion investment. In addition, the company also said it will start accepting bitcoin as payment for any of its products.
A $150 billion investment arm of Morgan Stanley is strongly considering joining the ranks of investors. Meanwhile, JPMorgan co-president Daniel Pinto said Friday that rising interest in Bitcoin is ensuring that their bank will get involved sooner than later. “If over time an asset class develops that is going to be used by different asset managers and investors, we will have to be involved. The demand isn’t there yet, but I’m sure it will be at some point,” he said in an interview. The government of Canada also wants in. As a result, Canada approved the first North American Bitcoin exchange-traded fund.
At the same time, more and more companies are either accepting crypto or adding services. BNY Mellon announced that it formed a new group dedicated to managing traditional and digital assets. Credit giant Mastercard said it will start allowing cardholders to transact in certain cryptocurrencies on its network.
“The key for Bitcoin’s path higher is to win over more corporate endorsements. Bitcoin is no stranger to massive weekend moves and the next several days could easily see some wild swings,” said Edward Moya, senior market analyst at Oanda Corp.
Despite the fact it remains an asset class with minimal regulations, it continues to gain wider acceptance. Some analysts remain skeptical of Bitcoin’s legitimacy as an asset. At the same time, the cryptocurrency managed to involve itself in many criminal activities. This includes incidents of money laundering, scams, and outright stealing.
Nicholas Taleb, author of “The Black Swan,” announced he’s getting rid of his Bitcoin. He noted that currency should remain less volatile than what people buy and sell with it. Also, Taleb tweeted that you can’t price goods in the cryptocurrency. “In that respect, it’s a failure (at least for now),” he tweeted.
Others Will Follow
Despite the concerns, more Wall Street big guns are warming up to Bitcoin. Each major firm announcing its adoption of cryptocurrency will spur others to join them. “With each major announcement like the one BNY Mellon made, other institutions are spurred to more rapid adoption and deployment of digital assets,” said Patrick Campos, chief strategy officer at Securrency.
“Tesla’s recent announcement will embolden other large corporates and institutions to accept crypto as not just a worthy asset class, but perhaps even an essential one,” he added. As for those who already joined Bitcoin, Galaxy co-president Damien Vanderwilt said many companies have yet to comment on their actual investments. “You’re going to see a range of releases over 2021, there will be more corporates, pensions, more insurance companies” investing in bitcoin, he said.
Price Will Continue to Surge
Bitcoin’s surge will continue as more firms join the bandwagon. Traders anxiously await the time when bitcoin gets enough mainstream appeal. An anonymous trade summarizes the present condition: “In this industry, we’re always looking for things that make money. And there’s this shiny thing that’s so freaking volatile and we’re told we can’t touch it — it’s like the forbidden fruit.”
Watch the CNBC News video reporting that Wall Street banks are inching closer to adopting bitcoin:
Do you plan to invest in bitcoin or other cryptocurrencies now that it’s beginning to get the mainstream appeal? Or, do you still find the concept of cryptocurrency speculative and too volatile? Let us know what you think of Bitcoin by sharing your comments below.