A new wave of institutional interest has boosted bitcoin. Here are the key players getting involved, from JPMorgan to PayPal.

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A growing number of companies are becoming interested in bitcoin.

Bitcoin regained its composure this week to jump to a record high above $60,000, with many analysts pointing to a new wave of institutional interest as the driver.

Goldman Sachs restarting its crypto desk, JPMorgan launching a “crypto exposure” product, and crypto firm NYDIG raising money from Morgan Stanley and others are the latest signs of growing interest in bitcoin.

Skeptics argue that bitcoin is too volatile for investors to start buying in any meaningful quantities and has next to no use value, putting it in line for another collapse.

But a rising number of firms are testing the crypto-waters. Bitcoin enthusiasts argue that “this time is different” for the world’s biggest cryptocurrency, because big-name firms are supporting the price and lending legitimacy to the project.

Here’s a rundown of some of the major players taking steps towards bitcoin.

12 March: MicroStrategy buys another $15 million

Michael Saylor’s business intelligence firm MicroStrategy bought another $15 million worth of bitcoin, it said on Friday. It brought the company’s total holdings to 91,326 units, worth around $5.3 billion on 12 March.

Saylor has long advocated companies investing their cash in the cryptocurrency, and first bought bitcoin in August 2020.

9 March: JPMorgan launches ‘crypto exposure’ product

An SEC filing on Tuesday by the bank showed it is creating a “basket of companies with exposure to cryptocurrency” that will be dominated by MicroStrategy and Square.

JPMorgan will create debt products linked to the performance of the crypto basket, giving investors indirect exposure to the cryptocurrency market.

8 March: NYDIG raises $200 million from big names

Morgan Stanley and Soros Fund Management were among the big names to get behind crypto technology firm NYDIG in a $200 million raise.

7 March: Chinese selfie app Meitu snaps up around $40 million in crypto

The photo-retouching company Meitu, which is hugely popular in China, said it bought about $22.1 million of Ethereum’s cryptocurrency ether and $17.9 million of bitcoin.

1 March: Goldman Sachs relaunches crypto trading desk

Reuters reported that Goldman would restart its crypto desk and begin dealing bitcoin futures and non-deliverable forwards for clients in March.

The bank’s chief operating officer John Waldron said later in March that “client demand is rising” for bitcoin. And Goldman survey of nearly 300 clients found 40% had exposure to cryptocurrencies.

February 23: Jack Dorsey’s Square buys $170 million more bitcoin

Twitter boss Jack Dorsey’s fintech company Square bought another 3,318 bitcoins for $170 million. That took its holdings to more than 8,000, worth upwards of $450 million on 12 March.

Jack Dorsey
Square founder Jack Dorsey is a crypto-backer.

February 18: First North American bitcoin ETF launches

Canada has now approved 3 bitcoin ETFs, but the US is yet to approve any. Experts say ETFs could spur further rises in the bitcoin price by allowing more institutions to invest.

Canada’s Purpose Bitcoin ETF, the first to launch, had 913 million Canadian dollars ($731 million) under management on 11 March.

February 11: BNY Mellon plans to issue, hold and transfer clients’ bitcoin

Bank of New York Mellon plans to issue, hold, and transfer clients’ bitcoin, The Wall Street Journal reported. America’s oldest bank will soon allow digital currencies to be treated the same as more orthodox investments in its asset-management system.

February 10: Mastercard will allow merchants to accept select cryptocurrencies

Mastercard will begin allowing customers to use some cryptocurrencies on its network later this year, although it did not specify which.

“We are preparing right now for the future of crypto and payments,” Raj Dhamodharan, executive vice president of digital asset products said in a blog.

February 8: Tesla says it invested $1.5 billion in bitcoin

Elon Musk’s Tesla powered a jump in the bitcoin price by announcing it had invested $1.5 billion in bitcoin in January. It also said it plans to accept bitcoin as payment.

Some critics said the bet had exposed the automaker to “immense” risks that could hammer its profits if the bitcoin price plunges.

January 21: BlackRock authorizes funds to invest in bitcoin futures

The $8 trillion asset manager BlackRock has authorized two of its funds to invest in bitcoin futures, according to January filings with the Securities and Exchange Commission.

November 27: Guggenheim reserves right to invest in Grayscale Bitcoin Trust

Guggenheim disclosed in an SEC filing that its Macro Opportunities Fund held the right to invest up to 10% of its net asset value in Grayscale Bitcoin Trust.

The Grayscale trust, the world’s biggest bitcoin fund, has become a key way for institutional investors to gain exposure to the cryptocurrency.

October 21: PayPal announces it will let customers buy and sell bitcoin

PayPal was in many ways a pioneer when it jumped into crypto in October 2020, allowing customers to buy, sell and hold bitcoin and other currencies using online wallets.

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Citi says bitcoin could become the currency of global trade in a ‘massive transformation’ – or it could implode

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Citi said bitcoin is at a “tipping point.”

  • Bitcoin could be at the start of a “massive transformation” into the mainstream of finance, Citi said.
  • The bank said it could even become central to global trade if innovation and adoption continues.
  • Yet it said bitcoin is at a “tipping point” and could implode if investors go off the technology.
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Bitcoin could be at the start of a “massive transformation” into the mainstream of finance, a major report from Citi has said, and could even become the currency of global trade.

However, Citi analysts said bitcoin is at a “tipping point” and could also suffer a “speculative implosion”. They said improvements to cryptocurrency systems would be needed to drive wider adoption, and said increased regulation could drive away some of the most innovative players.

In a 108-page deep-dive into cryptocurrencies, Citi said there had been a major change in bitcoin from “primarily a retail-focused endeavor to something that looks attractive for institutional investors” as they search for higher returns and alternative assets.

Citi’s analysts speculated that a rise in other bitcoin-like products – such as private “stablecoins” and central bank digital currencies – would add legitimacy to the crypto world, while making such technologies easier to use and more integrated into economies.

“In this scenario, bitcoin may be optimally positioned to become the preferred currency for global trade,” a team of Citi analysts led by Sandy Kaul, global head of Citi’s business advisory services, said. in a report.

“It is immune from both fiscal and monetary policy, avoids the need for cross-border foreign exchange (FX) transactions, enables near instantaneous payments, and eliminates concerns about defaults or cancellations as the coins must be in the payer’s wallet before the transaction is initiated.”

The report highlighted increased acceptance of cryptocurrencies by companies such as PayPal, Mastercard and Tesla, and said bitcoin’s scarcity means investors are increasingly comparing it to “digital gold.”

These developments have helped drive the price of bitcoin up more than 400% over the last year, although it sank more than 20% last week. The bitcoin price (BTC) stood at around $47,800 on Monday.

Yet Citi said there were a number of “obstacles and challenges” to be overcome, and said there would have to be “upgrades in the way the marketplace works.” For example, big investors would want more guarantees on safety and for the market to be more efficient before they pile in, the bank said.

The bank’s report also said increased acceptance of bitcoin would bring about more regulation, which could drive away some of the most innovative players.

“Many of the most innovative and talented developers may choose to withdraw from established platforms deploying more extensive oversight and monitoring. This could end up dividing the liquidity in the system.”

Citi said bitcoin’s future is “unknowable”. But it added: “Developments in the near term are likely to prove decisive, as the currency balances at the tipping point of mainstream acceptance or a speculative implosion.”

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Bitcoin is irrelevant to financial markets and investors ‘are going to weep’ if regulators come down hard on crypto, says Kevin O’Leary

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  • Kevin O’Leary told CNBC on Thursday bitcoin is irrelevant to financial markets and at risk of regulation. 
  • His comments come as an increasing number of institutions like Guggenheim and SkyBridge capital invest millions into the cryptocurrency, driving a rally of over 200% in 2020. 
  • “I’m waiting for the day that one of these regulators comes down hard on bitcoin. Grown men are going to weep when that happens. You’ll never see a loss of capital like that ever in your life. It will be brutal,” he said. 
  • Treasury Secretary Steven Mnuchin is proposing new regulation that would require certain cryptocurrency traders to provide more information about their identities and cryptocurrency transactions.
  • View Business Insider’s homepage for more stories.

Kevin O’Leary told CNBC on Thursday that bitcoin is irrelevant to financial markets and too at risk of regulations to be taken seriously by institutional investors.

“Is this a nothing burger? It’s not even a single cell amoeba,” the O’Shares chairman said,
“I love to talk about it, it’s fun to watch it go up and down, but during the day, when the bell rings, I don’t talk to anybody that’s worried about this. They do not put capital to work in bitcoin.”

His comments come as more institutional players are piling in, validating bitcoin’s legitimacy as a store of value and hedge against inflation. Earlier this week, SkyBridge Capital invested $25 million into a new bitcoin fund, while last month, Guggenheim filed to reserve the right for 10% of its $5.3 billion Macro Opportunities Fund to invest in the Grayscale Bitcoin Trust.

Read more: Renowned strategist Tom Lee says to buy these 29 stocks that were ravaged by the pandemic but now poised to boom as the world reopens – and they’re all top-rated by 3 different investing strategies

O’Leary said that the concept of a digital currency will likely come to fruition in the future, but investors should be careful glorifying bitcoin while it has yet to fulfill a defined role in financial markets and while it could still be regulated. This year, bitcoin has skyrocketed over 200%, and many crypto bulls are forecasting an explosion of growth in 2021. 

Though regulations could be coming for the popular token. Treasury Secretary Steven Mnuchin is proposing new rules that would require certain cryptocurrency traders to provide more information about their identities and cryptocurrency transactions. This doesn’t appear to have scared off various institutional investors, but O’Leary, who said he has $52.77 in a crypto wallet, is more worried.

“I’m waiting for the day that one of these regulators comes down hard on bitcoin. Grown men are going to weep when that happens. You’ll never see a loss of capital like that ever in your life. It will be brutal,” he said. 

O’Leary added: “This whole market, even if Bitcoin were to go up, another 2000% is completely irrelevant to the institutional client.”

Read more: ‘I don’t see this ending well’: A 47-year market vet breaks down why stocks are a ‘few months’ away from a 75% crash – and says gold will surge to $10,000 because of a tidal wave of inflation

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Anthony Scaramucci’s SkyBridge hedge fund just invested $25 million in a bitcoin fund as it sees an ‘avalanche of institutional investors’ buying crypto in 2021

Anthony Scaramucci
  • Anthony Scaramucci’s SkyBridge Capital just launched a bitcoin fund and invested $25 million of capital. It will go live to outside investors in 2021.
  • After bitcoin’s 200% rally this year, investors may be hesitant to buy bitcoin at current levels. But Scaramucci told CNBC the coin is in its “early innings,” and he wants to get in before the price soars even higher. 
  • “We could be at the precursor of an avalanche of institutional investors heading in,” Scaramucci said on Tuesday.
  • Visit Business Insider’s homepage for more stories.

The latest institutional investor to dive into bitcoin is SkyBridge capital, Anthony Scaramucci’s hedge fund. The $9.3 billion firm filed an SEC form D on Monday to launch the “SkyBridge Bitcoin Fund L.P.”

Scaramucci told CNBC that the fund started trading on Tuesday with $25 million of SkyBridge’s funding, and will go live to outside investors who can invest a minimum of $50,000 on January 4.

After bitcoin’s 200% rally this year, investors may be hesitant to buy the cryptocurrency right now in fear that a post-rally pullback is on the way. But Scaramucci said bitcoin is in its “early innings,” and he wants to get in before the price soars even higher.

“We could be at the precursor of an avalanche of institutional investors heading in,” Scaramucci said in a Tuesday CNBC interview. He added there may be a large swath of investors buying bitcoin in the first quarter of 2021 because they didn’t want to put it on their balance sheets in 2020.

Read more: The CIO of a new crypto fund that has returned 220% to investors this year explains why bitcoin topped $20,000 for the first time ever this week – and shares another digital currency set to become the ‘asset of the year’ in 2021

The SkyBridge Capital founder also said bitcoin will be a “very strong asset class” over the next decade given the monetary supply and current central banking coordination. 

SkyBridge joins a growing group of institutional players that are acknowledging bitcoin’s legitimacy as a store of value. Last month, Guggenheim filed to reserve the right for 10% of its $5.3 billion Macro Opportunities Fund to invest in the Grayscale Bitcoin Trust.

Other firms like MassMutual have invested in the cryptocurrency as well. Meanwhile, billionaire investors such as Stanley Druckenmiller and Paul Tudor Jones have  publicly discussed their bitcoin purchases.

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