The digital asset climbs as frenzy soars.
The subject won’t go away, and the price keeps going up, now we are getting the second richest man on the planet discussing moving billions to Bitcoin with a tweet exchange with Michael Saylor, a leading promoter of the digital currency.
In a series of tweets, Saylor, chief executive officer of Microstrategy Inc., encouraged the billionaire to shift U.S. dollars from the electric-car maker to Bitcoin and “do your shareholders a $100 billion favor.”
“Other firms on the S&P 500 would follow your lead & in time it would grow to become a $1 trillion favor,” Saylor added in his tweet on Sunday.
Whatever the merits of this tweet exchange, it again nudges the crypto currency into the news and mainstream investing. We are following Musk closely, as he seems to do no wrong so I can guess all the crypto enthusiasts will milk this. I found over 30 headlines on this subject in three hours of the tweet. Examples.
Ok, we can all find info about current news and opinions , how has the market reacted already?
BTC/USD Takes a Breather as Bulls and Bears Contemplate Next Move but the price is breaking new territory.
What I want to know is what are the big banks and hedge fund managers saying about Bitcoin now?
A survey by the Bank last week reported,
that investors are increasingly optimistic about Bitcoin. The top cryptocurrency was the third-most crowded trade at 15%, beating traditional heavyweights such as gold and bonds. Bank of America Corporation (NYSE: BAC) revealed in its survey that investors have been reducing their cash positions for ‘riskier’ assets.
Ok, they are not endorsing or committing to the long term merits of owning the digital currency but have acknowledged that there has been increased demand this year.
Citigroup Chief Executive Michael Corbat said his bank is helping governments “around the world” in creating sovereign digital currencies, otherwise known as central bank digital currencies, or CBDC. Speaking at the beginning of December.
So will this impact on Bitcoin , as more banks create regulated alternatives?
Cryptocurrencies will have a role to play even the age of CBDCs, Corbat said Friday. He stopped short of commenting on bitcoin specifically. But he said that “some of these currencies will be continued alternatives, continued different sources of payment that people can take advantage of based on the underlying nature of what they are” – a seeming reference to stablecoins. Ok, again non committal but an acknowledgment of Bitcoins importance today in this growing sector, digital cash.
Quoting , Goldman Sachs’ head of commodities research calls bitcoin “the retail inflation hedge” and likens the cryptocurrency to copper. He says gold and bitcoin can co-exist and does “not see bitcoin’s rising popularity as an existential threat to gold’s status as the currency of last resort.”
Jeff Currie, global head of commodities research at Goldman Sachs, revealed his outlook for bitcoin, gold, and copper on Thursday. Commenting on the recent surge in bitcoin’s price, he said on Bloomberg Markets that looking at its price chart, bitcoin looks “very similar” to copper. “What do they have in common?” he continued:
"They are both risk-on growth proxies, and I would argue that bitcoin is the retail inflation hedge".
Currie emphasized that gold is a defensive asset and “there’s really no evidence” that BTC “stole demand from gold.” Goldman Sachs’ analysts wrote,
"We do not see bitcoin’s rising popularity as an existential threat to gold’s status as the currency of last resort … We do not see evidence that bitcoin’s rally is cannibalizing gold’s bull market and believe the two can coexist". Ok, another acknowledgment of its increase prominence.
JPMorgan Says flows into major Crypto Funds Are Key to Bitcoin’s outlook.
The Grayscale Bitcoin Trust’s assets under management have climbed to $13.1 billion from $2 billion at the start of December last year, amid a tripling in the digital currency’s price so far in 2020. Inflows into the fund are running at about $1 billion per month, the strategists led by Nikolaos Panigirtzoglou wrote in a note Friday.
While it’s hard to avoid describing Bitcoin as “overbought,” the flows into the trust “are too big to allow any position unwinding by momentum traders to create sustained negative price dynamics,” the strategists said. A major slowdown in those flows would boost the risk of a Bitcoin correction akin to the one in the second half of 2019, they said. Interesting, non committal to a similar correction as last time. Read more.
Morgan Stanley Investment Management’s chief global strategist and head of emerging markets, Ruchir Sharma, published an opinion piece in the Financial Times on the 9th of December.
He explained how bitcoin is making progress towards replacing the U.S. dollar and becoming the world’s reserve currency.
The Indian investor began by recalling that when the coronavirus pandemic hit, the U.S. dollar was the world’s “reserve currency,” noting that it has been one for 100 years while other previous reserve currencies lasted about 94 years on average. “That would have been reason to question how much longer it could continue, but for one caveat: the lack of a successor,” Sharma described, noting some contenders that fall short, such as the euro or China’s renminbi. “US officials were thus confident that, in response to the Covid-19 lockdowns, they could print the dollar in limitless quantities without undermining its reserve currency status, allowing the country to keep running large deficits without apparent consequences,” the strategist continued, elaborating:
"But a new class of contenders is emerging: cryptocurrencies … cryptocurrencies such as bitcoin are being pitched by their champions as decentralized, democratic alternatives".
While pointing out that there are bitcoin skeptics, including those who prefer gold, Sharma said, “many people have bought bitcoin in bulk,” as they fear that “central banks led by the US Federal Reserve are debasing the value of their currencies.” This has boosted the price of bitcoin which has “more than quadrupled since March, making it one of the hottest investments of 2020.”
Sharma then warned governments that “Bitcoin’s surge may still prove to be a bubble, but even if it pops, this year’s rush to cryptocurrencies should serve as a warning to government money printers everywhere, particularly in the US.
The strategist concluded, “And stepping in to regulate the digital currency boom, as some governments are already considering, may only accelerate this populist revolt.”
I think it is more of an acknowledgement that digital currencies, centralized by banks and governments are coming, nonplus about Bitcoins long term price.
Elon Musk, like all the great influencers has shone a light on Bitcoin again and the debate goes on, is it here to stay and where will the price go. No doubt, he moved the price.
In reference to banks, it is obvious there has been massive investment in crypto's over the past few months and must abide by the appetite of their customers to service them. Will a move to introduce Digital currencies, in the main stream, regulated by banks and Government's have a long term impact of the price of Bitcoin???