Bitcoin crossed the $57,500-mark as on Feb 21, 2021, 9.59 AM, up about 76% past month. Notably, bitcoin soared about 200% last year. Institutional interest and greater corporate acceptance have mainly led to this buoyancy. The latest surge came on the back of Blackrock, Tesla and Apple.
Last week, the world’s largest asset manager, Blackrock
BLK
, has started investing in bitcoin. BlackRock said “people are looking for storehouses of value. People are looking for places that could appreciate under the assumption that inflation moves higher and that debts are building, so we’ve started to dabble a bit into it,”
as quoted on bitcoin.com
.
The cryptocurrency also gained this height by virtue of Tesla’s
TSLA
investment of $1.5 billion, which made it the biggest company to show support to the otherwise controversial cryptocurrency. Tesla would start accepting payment for its electric vehicles in the currency.
Last week, Mastercard announced that it will let certain cryptocurrencies directly on its network and
BNY Mellon started a crypto unit
to provide clients with bitcoin services. BitPay, a Bitcoin and cryptocurrency payment provider,
also announced in mid-Feb
that U.S. cardholders can add their BitPay Prepaid Mastercard to Apple Wallet, making it more user-friendly to buy everyday items using the cryptocurrency payment service.
Before this,
PayPal Holdings Inc
PYPL
had also announced such a move. PayPal’s Competitor
Square
(SQ) launched support for bitcoin back in 2018 through its Cash app. Square also bought $50 million in bitcoin in October as part of a larger investment in cryptocurrency.
Corporations’ greater acceptance in allowing customers to hold bitcoin and other virtual coins in their online wallets has been favoring the cryptocurrency. David Marcus, the head of Facebook Financial, also known as F2, said he hopes the Facebook-backed cryptocurrency called Diem will hit the market in 2021.
Some banks like HSBC and J.P. Morgan have now completed a bond issuance on a blockchain network
, or utilized products developed by others using the technology in some form.
More Corporate Acceptance Awaiting Ahead?
Antoni Trenchev, managing partner and co-founder of Nexo in London (one of the world’s biggest crypto lender), expects at least 10% of S&P 500 companies to remain invested in Bitcoin by the end of 2022,
as quoted in a source
.
Sergey Nazarov, the cofounder of Chainlink, said a few days back that “rising inflation and increasingly negative views of modern monetary policy are forcing investors to look for alternative ways to preserve the value of their capital,”
as quoted on Businessinsider
. Billionaire Jeff Gundlach, the head of DoubleLine Capital
,
said bitcoin tops
gold as ‘stimulus asset
.’
What’s Brewing on the ETF Front?
A bitcoin ETF could finally see the day of the light in 2021 as VanEck recently filed an application with the SEC. Notably, the SEC had earlier rejected several bitcoin ETF proposals. Investors should note that though the United States is yet approve a bitcoin ETF, Canada has rolled it out.
Purpose Investment’s bitcoin ETF officially started
trading on the Toronto Stock Exchange (TSX) under the ticker “BTCC” on Feb 18. The fund has collected $421.8 million in assets under management (AUM) in two days. Bloomberg Intelligence ETFs analyst Eric Balchunas tweeted the Purpose Investment’s bitcoin ETF could amass $1 billion in assets by the end of next week, as quoted on coindesk.com.
There has been an improvement in the United States too. Osprey Fund’s bitcoin trust is now open for retail investors via OTC. The fund is designed similarly to the Grayscale Bitcoin Trust, but looks to compete with lower fees.The
Osprey fund has nearly $80 million in assets under management
and can be reached directly by accredited investors and indirectly by retail investors via OTC trading desks. The fund charges 49 bps in fees while Grayscale’s product has 2% annual fee.
How to Invest in Bitcoin Now?
Investors cannot lay their hands on a digital currency ETF now, they can definitely familiarize with the concept through blockchain ETFs like
Siren Nasdaq NexGen Economy ETF
(
BLCN
),
Amplify Transformational Data Sharing ETF
(
BLOK
)
and
First Trust Indxx Innovative Transaction & Process ETF
LEGR
. Notably, the blockchain technology in bitcoin
keeps track of the balances for all users
and updates them on each transaction.
Also, ETFs offering exposure to the blockchain ecosystem via semiconductor companies that make chips for bitcoin mining can be played. The most-popular funds include
iShares PHLX Semiconductor ETF
SOXX
and
VanEck Vectors Semiconductor ETF
SMH
.
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