Behind the Bitcoin Bull Run: Wall Street and Fintechs
Original title: "Wall Street and Fintech Vote Bitcoin"
Original source: CoinList
They say this time is different. While bitcoin veterans are no strangers to energetic rallies, the latest exuberant bull run suggests a shift in the catalyst driving the market forward.
The last time BTC reached $17,000, it was people who expected "blockchain to change the world" Promoted by enthusiastic retail investors. At the time, institutional perceptions of Bitcoin as an asset class hovered between apathy and Warren Buffett’s infamous “rat poison” analogy. With bitcoin hitting price highs not seen in nearly three years, it's clear that the market roles have been reversed, with Wall Street and fintech firms now driving bitcoin forward.
First the whale, then other followers
< p line="QhIY">While Buffett and some other high-profile investors continue to criticize, on-chain data shows that many ultra-high-net-worth individuals are starting to sing the "bad tune."
according to Glassnode , average value per transfer since mid-2019 About 3 BTC, while the average value of each transfer over the past two months has been around 8 BTC. This shows that well-capitalized individuals/institutions are increasingly participating, while most retail investors are still on the sidelines. BTC has been above the current price for only 17 days, which is only 0.4% of its entire lifetime. But the number of long-term holders continues to climb. 62% of Bitcoins have not been transferred in over a year, an all-time high , suggesting that more and more holders — or at least whales — will be in it for the long haul.
There may be a separation of powers in the Washington government. The Democrats control the White House and Congress, and the Republicans have a majority in the Senate. Net worth also bodes well for individuals. In the first 100 days of Biden's term, the economic stimulus plan is likely to pass, because some key people selected by the Treasury Secretary have the idea of supporting a large-scale stimulus plan. Elizabeth Warren and Janet Yellen, the two leading candidates, both back far-reaching measures that would inject trillions of new dollars into the economic system. Meanwhile, appetite for tax increases for the wealthy has been lower than expected after Democrats failed to win a "blue wave" in the Senate, House and state legislatures. The impending helicopter money drop, and the likelihood that tax rates will not be significantly increased, could drive more institutional allocation to Bitcoin.
Meanwhile, indicators of retail investor interest appear to be missing the recent surge in markets. According to Google Trends, searches for “bitcoin” are nowhere near their 2017 peak levels, suggesting retail interest hasn’t reached its peak yet. Retail investors, many of whom were hurt badly at the end of 2017, may need Bitcoin to break out of its all-time high before their interest peaks again.
Thanks to PayPal, that may start to change. A month ago, the fintech pioneer announced that it would not only offer bitcoin purchases to its 300 million users, but would also allow users to pay for goods and services using bitcoin.
More and more institutions are bullish on Bitcoin
< p line="br1F" linespacing="150">Bitcoin may have a virtuous cycle. The growing institutional interest has set the stage for the formalization of Bitcoin ownership among traditional financial institutions, which in turn has attracted more institutional attention.
Just recently, the legendary hedge fund investor Stan Druckenmiller joined the bandwagon, revealing that he owns bitcoin and sees the asset as a store of value to rival gold. Druckenmiller joined Paul Tudor Jones and other Wall Street luminaries join the ranks of Bitcoin as a as part of a diversified, risk-adjusted investment portfolio.
In addition to individual investors and consumer services companies like Paypal that brave new fields, There are also other public companies that use Bitcoin as a core component of their treasury management strategies. Microstrategy, a $1 billion business analytics firm, was the first to buy 38,250 bitcoins at an average price of $11,100. Soon, fintech giant Square joined in. The company announced that it also bought $50 million worth of bitcoin for itself after a long period of involvement in the bitcoin ecosystem. Businesses looking for a safe-haven asset have turned to bitcoin as cash suffers from inflation and low to negative interest rates.
Microstrategy and Square CEOs Not only Believe in Bitcoin, but Publicly Promote Bitcoin preacher. Square and Microstrategy's Bitcoin investments are well timed. Their investments grew 53% and 44%, respectively, and are now worth $650 million and $75.5 million, respectively.
New entrants promote themselves
Perhaps no company represents the shift in sentiment towards Bitcoin quite like JP Morgan. The CEO of the investment bank, who once lashed out at bitcoin, is now touting it as a legitimate challenger to gold. While JPMorgan and its CEO can hardly be considered an all-around bull on Bitcoin, they do represent a common course for many skeptical institutions.
First, they try to convince the masses that Bitcoin is a dangerous speculative asset with no utility. Failing that, they push Bitcoin into the fold, claiming that other assets offer better risk-reward ratios. When they can no longer turn a blind eye, they will be enthusiastic about the emergence of Bitcoin as an alternative asset class. Before long, these new entrants became evangelists for Bitcoin, like Jack Dorsey, Michael Saylor, Paul Tudor Jones, and Stanley Druckenmiller. For these enthusiastic business leaders, public support for Bitcoin was a logical step in their crypto journey.
Welcome to join the official BlockBeats community:
Telegram Subscription Group: https://t.me/theblockbeats
Telegram Discussion Group: https://t.me/BlockBeats_App
Official Twitter Account: https://twitter.com/BlockBeatsAsia
Related Articles
