Bitcoin continues to rise in price, even breaking through the $50,000 mark last week and reaching a capitalisation of $938 billion – making it the sixth most valuable entity in the world.
That put only the likes of Apple ($2.2trillion), Saudi Aramco ($2trillion), Microsoft ($1.8trillion), Amazon ($1.64trillion), Alphabet aka Google ($1.4trillion) and Facebook ($781 billion) ahead of it.
On the positive side, are we now approaching a tipping point as institutions begin to hold a percentage of their treasuries in bitcoin? A website worth keeping an eye on is Bitcoin Treasures that lists publicly traded companies and funds that hold BTC.
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BTC is very liquid and in just one 24hr period last week there was over $62 billion of it traded on the spot market, so that’s ignoring the derivatives and futures market. And with commodity prices rising – just look at copper and oil prices – BTC is seen by some institutions as an against-inflation hedge.
And this all comes at a time when the US dollar is declining, hitting a two-year low against sterling last week as FX markets fret over the on-going fiscal stimulus in America.
There has also been a string of announcements recently from leading payment processing businesses now enabling their customers to use crypto currencies.
Bitpay, the largest providers of Crypto payments globally, have teamed up with Apple Pay so that its debit card Mastercard clients will be able to use Apple Pay.
The cryptos that BitPay will initially allow its users to hold include Bitcoin, Bitcoin Cash, BUSD, Ether, PAX, USDC, and GUSD. As well as Apple, Samsung Pay has also announced an agreement with BitPay.
Even Google Pay has joined in signing up Bitpay so its customers will also be able to buy and store crypto as well as make online payments. All three of these forms will use BitPay’s app so they can convert fiat currencies into crypto currencies and vis versa.
Not to be left behind Visa, its much bigger rival Mastercard, as reported by Reuters, has said it will support a select number of cryptos thus enabling its merchants to accept certain digital assets as a form of payment.
Meanwhile, Facebook’s Diem digital currency is still waiting for approval from the Swiss regulatory authorities and, arguably, it was this proposal that first stirred central bankers into taking digital currencies seriously.
On the other side of the coin, the US crypto giant Ripple, with its XRP currency, is unlikely to agree a settlement pre-trial with the Securities and Exchange Commission, so is this a sign that the new Biden administration is taking a harder stance on crypto?
Nothing goes up for ever and BTC has risen in value in the last year by over 389% and still accounts for over 60% of the entire capitalisation of the crypto market.
Having run an asset management firm for over 20 years and studied investments for 40-plus years I have learnt nothing goes up forever. But remember the old adage ‘the trend is your friend’ and currently the trend seems to be up, up, up! However, perhaps we should also remember the other investment expression “always leave some profits for the next person”.
- Jonny Fry is CEO of TeamBlockchain Ltd