1. High-Profile Interest
The walls are down and companies are flooding into Bitcoin (BTC). According to analysts at JPMorgan Chase, some institutional investors are taking on Bitcoin exposure, such as buying into the publicly traded Grayscale Bitcoin Trust (GBTC). Major money manager, Guggenheim whom oversees $233 billion for investors, said in regulatory filings its Macro Opportunities Fund might allocate up to 10% of net assets to GBTC.
High-profile bulls like the Winklevoss twins have long backed the currency, hedge fund kingpin Paul Tudor Jones and publicly traded companies like Square are putting some of their assets into the cryptocurrency. Furthermore, the outstanding number of Bitcoin futures contracts is surging on the Chicago Mercantile Exchange, seen as another sign that big investors are using commodities markets to speculate Bitcoin’s price.
2. Best Performing Asset
Bitcoin (BTC) is the top performing asset of 2020, outpacing gold, silver and crude oil. Over the past five months, the price of bitcoin has risen by 35%. Meanwhile, gold has only risen by around 13%, silver has fallen by 14% and crude oil has dropped by more than 70% in value.
Hedge fund manager, Stanley Druckenmiller, recently said the cryptocurrency’s price, as denominated in U.S. dollars, could rise as the Federal Reserve prints money to help finance the government’s coronavirus-related emergency stimulus bills. The central bank has thus far created more than $3 trillion of new money in 2020, or more than three quarters of the entire amount created during its prior 107-year history.
Bitcoin has also overtaken other cryptocurrencies. The rush of coin launches that were seen in 2017 have subsided, and even long-standing altcoins like Litecoin and those associated with Ethereum and Ripple are still down from their all-time highs, according to CoinDesk. That means investors looking to get into crypto may be more likely to simply go with market leader Bitcoin.
3. Ease of Use
With apps like Coinbase, Crypto.com and now mainstream financial tools it’s never been easier to aquire digital assets. Square’s Cash App lets users buy and sell Bitcoin (BTC) and PayPal followed suit in November, saying it will also let people pay with Bitcoin at merchants and buy and sell through Venmo in 2021.
Even your local bank may soon be able to help you (or your family) get into Bitcoin. As The New York Times reports, the Office of the Comptroller of the Currency, a federal bank regulator, ruled in July that banks may hold cryptocurrency for clients.
Wall Street analysts have made positive comments over the past few days. AllianceBernstein, a $631 billion money manager, published a report saying the post-pandemic economic environment could create a role for Bitcoin in investors’ asset allocation, CoinDesk reported Monday. Inigo Fraser Jenkins, co-head of the portfolio strategy team at Bernstein Research, wrote that when it comes to a role in hedging against inflation, “the driver of Bitcoin is similar to that as for gold.”