Talks of JPMorgan Chase offering Bitcoin for its wealthy customers has assisted the maximum cryptocurrency rebound back from its recent lows. The transfer will help legitimise the going concern of this digital money that has been announced ‘dead’ about 400 times within the past decade.
‘The number of such proclamations peaked in 2017, however the trend has been diminishing; 2020 watched the fewest Bitcoin obituary predictions in eight years,’ said that a Deutsche Bank (DB) Research report published in March this year.
The cost of Bitcoin surged almost 10 percentage on April 26 to trade over $53,700, after the report of JPMorgan preparing such a fund.
A single Bitcoin was priced at $1,000 at the start of 2017, that climbed to almost $20,000 by the end of the year.
The cryptocurrency once more captured the limelight in 2020, amid the COVID catastrophe, rising over 300 percent throughout the calendar year.
‘Among the most crucial aspects driving bitcoin’s increased demand was the entry of hedge funds and other institutional investors,”’ states the DB Research report.
BTC has had a remarkable run this year, doubling in the first few months of 2021 on rising institutional interest from the asset class. Year-to-date, it’s up roughly 90 percent.
Last month, Morgan Stanely became the first large U.S. bank to offer its wealthy customers access to bitcoin funds, reported CNBC. Even though Nexon–a video game publisher company acquired 1,717 Bitcoins in an average cost of approximately $58,226 each, lately.
With big institutional investors going into the sport and buying the dip, specialists suggest that these gamers are working to handle the volatile asset with ease.
Read: Here’s how the cryptocurrency works
On April 26, Elon Musk, Tesla’s principal executive officer, also stated the electric car maker had offered 10 percent of its bitcoin holdings to prove the cryptocurrency’s liquidity as an alternative to cash.
No, you don’t. I have not sold any of my Bitcoin. Tesla sold 10 percent of its holdings basically to prove liquidity of Bitcoin as an alternative to holding cash on balance sheet.
– Elon Musk (@elonmusk) April 26, 2021
Tesla’s earnings statement stated it produced $101 million by selling any of its Bitcoin tokens, which it had purchased for over $1 billion before in 2021.
In February 2021, Tesla’d invested $1.5 billion in Bitcoin, nearly 8% of its reservations, as part of its wide investment policy. The electric vehicle company had said it would soon start accepting Bitcoin because a kind of payment because of its own vehicles.
Much like Tesla, a couple more publicly traded firms have converted money in their treasuries to Bitcoin. Here Is a list of these companies holding Bitcoins:
With giants like Tesla, MicroStrategy, Square preferring to invest in virtual currencies as an alternative store-of-value for greater returns in the long term, this could further add to the confidence of investors in such financial instruments.
However, Bitcoin or any cryptocurrency for that issue still has a very long way to go owing to the low acceptability and tradeability factor in the currency industry.
‘Bitcoin’s overall value is $1,075 billion (as on March 15, 2021) which is around 102 percent of the Yen in flow, 65 percent of those Euros, 53 percent of the USD, and 904 percent greater than the GBP. Yet, the normal amount of bitcoins exchanged every day in USD is equivalent to just 0.05% of the Yen and 0.06% of the GBP,’ the DB Research report said.
Bitcoin has been explosive and that is one of the motives because of it not being accepted broadly by traders or at the currency market. However, it has attracted significant attention and appeal among investors even in India.