Many analysts believe that one of the key factors driving Bitcoin’s recovery is the pursuit of institutions, well-known investors, and large-scale companies.
On the morning of March 10, Bitcoin price passed $ 55,000, up more than 22% from a revised low of $ 45,000, hitting a two-week high, and official market value back to $ 1 trillion.
|Bitcoin price continues to accelerate again after 2 volatile weeks|
Many prominent Wall Street billionaires openly support Bitcoin and praised the cryptocurrency’s potential as a hedge against inflation, said Henri Arslanian, Head of Crypto Global Business at Pricewaterhouse Coopers. . He predicts that this trend will continue in the coming months as there are many different tools available now that allow institutions to invest in Bitcoin. At the same time, retail investors’ fear of missing out has also pushed the price of Bitcoin to the top.
Of course, some analysts believe that central banks around the world maintain extremely low interest rates and implement easy monetary policies such as planning to buy assets, undermining the value of coins. fiat money like USD, while Bitcoin can give investors more options.
Institutional investors and companies flocked to buy
Recently, many big companies including Tesla, Square, Microstrategy and other famous companies are buying Bitcoin. Regarding retail investors’ fear of missing out, Henri Arslanian analyzed that buying cryptocurrencies is now more convenient than it used to be, and more retail investors have accounts on crypto exchanges. before. “With the impetus of these two factors, Bitcoin is fully motivated to skyrocket, and the overall situation of the cryptocurrency market is also very optimistic.”
Anthony Pompliano, co-founder and partner of Morgan Creek Digital Assets, said global central banks are loosening monetary policy. “Trillions of dollars have been pumped into the market, from individuals to financial institutions to companies flocking around the world to find the best way to protect their purchasing power, and ultimately they decided to buy Bitcoin ”. He even boldly predicted that Bitcoin will rise to $ 500,000 by the end of 2030.
Many Wall Street financial institutions have also begun to share Bitcoin transactions
Cryptocurrency exchange Goldman Sachs has been restarted and will be offering customers Bitcoin futures and non-redistributable futures (NDF) trading services starting this week. It is part of the bank’s global markets division, created by Goldman Sachs to accommodate the rapidly growing operations in digital assets. Goldman Sachs is still exploring the possibilities of Bitcoin exchange-traded funds and has issued an information request to explore digital asset custody.
Additionally, in a document submitted by JPMorgan Chase to the US Securities and Exchange Commission (SEC), a structured note related to cryptocurrencies will be released. Investors will not pour money directly into Bitcoin but on related companies. 20% of the money will be invested in Microstrategy, 18% will be invested in Square, and the remainder will also be invested in companies such as Riot, Blockchain, Paypal and Nvidia.
Before that, Fidelity also started offering crypto-related products and services. Fidelity’s global head of macro operations, Jurrien Timmer, says that Bitcoin has convincing supply and demand dynamics. With a value of $ 11 trillion in gold and $ 160 trillion in the world’s total financial assets, Bitcoin still has plenty of room for growth.
Many risks threaten
Even so, analysts are also wary of the legal risks Bitcoin may face. “Unlike before, there are many regulators on the market, and they are also players in the Bitcoin exchange market,” said Anthony Pompliano. Citibank recently reported that for digital currencies, changes in regulatory policy are the biggest risk, if regulations are tightened, some hedge funds will return to the market. yellow.
Currently, the most imminent legal risk comes from US regulators. Last week, Finance Minister Janet Yellen once again expressed his attitude towards Bitcoin. “I don’t think Bitcoin can become a widely used transaction mechanism.” She also said that Bitcoin is “often used for illegal funding”.
|The US Treasury Secretary has many statements that directly affect Bitcoin’s price movements|
Under the Trump administration, he wants to introduce new crypto industry governing rules, requiring financial services companies to record and submit the identities and transaction information of certain owners of electricity. to restrict money laundering or other illegal activities of cryptocurrencies. Following Biden’s inauguration, the Treasury Department’s Financial Crime Enforcement Network (FinCEN) is still working on the set of rules, and the timetable for consultation on the rules is later this month.
The US Chamber of Commerce has stated that this regulation will have “unintended long term consequences” for the cryptocurrency industry. The monetary insiders believe that this set of policies will threaten the core “decentralization” function of cryptocurrencies, if implemented potentially causing the price of cryptocurrencies to plummet.
In addition to the Treasury Department, the SEC may also strengthen cryptocurrency oversight. The new SEC president, Gary Gensler, is himself an expert on cryptocurrencies and from recent comments suggests he will strengthen relevant scrutiny. This week, Gary Gensler announced once again that under its regulation, the SEC will ensure that the cryptocurrency market is “free from fraud and manipulation”.
Tesla evaporated $ 300 billion in market value due to Bitcoin speculation?
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