Since the beginning of this year, Bitcoin has been on somewhat of a rollercoaster ride, registering sky-high surges as well as stomach-churning declines. This ride continued into last week when the digital asset hit a new record high of $63,000 as the rally gained further momentum.
In fact, over the past 12 months, Bitcoin has been enjoying quite the Bull Run, apart from the occasional dips. And in its wake, a number of other popular cryptocurrencies such as Ethereum have been seen climbing the charts as well. The cryptocurrency market has been growing at an exponential rate and is worth about $2 trillion. This comes as a direct result of the cryptocurrency racking up headlines, with a wave of investors buying in, much of which are major institutions.
However, many investors claim they’ve seen this film before as financial analysts draw parallels to the 2017 bull run, several of them claiming it could land investors a similar fate if they continue down the crypto path. But Wall Street has, since then, changed its tune with some of the largest institutions and biggest names declaring their allegiance with this digital money.
One of the driving forces behind such a shift in institutional interest has been the ongoing Covid-19 pandemic that demanded a more digitized approach to even the everyday tasks. Therefore, it didn’t come as big of a surprise when major waves of interest were observed in the crypto world.
Moreover, as the fiscal and monetary stimulus expanded, the fears of inflation and possible devaluation grappled many people. But due to the asset’s scarce nature, almost 18.6 million out of a total of 21 million Bitcoins already mined, many started viewing it as an effective hedge against inflation.
Hence, as a result of the prevailing economic conditions and the move towards a more digitized financial system, a number of high-profile companies, institutions, money, and hedge fund managers have decided to give in to the Bitcoin frenzy. While some of them have announced their share in Bitcoin and other crypto coins, others have been seen making promises to allow their use in the near future.
Elon Musk, the chief executive of the electric car manufacturer Tesla, is seemingly at the forefront of this crypto-mania. He has been tweeting on and off about different crypto coins, but especially Bitcoin, which has raised alarm bells in some corners of the market. Tesla announced back in February that it had taken up $1.5 billion worth of Bitcoin. This news was received positively as the digital currency saw a surge right after the announcement. But that’s not all. In March, the company also allowed its users to use Bitcoin as a means of payment for all its cars.
Major fintech behemoths are also close behind as well, which is what primarily separates this bull run from the one in 2017. The involvement of banks and large financial institutions in the crypto space over the past year greatly legitimize Bitcoin and helped validate it among skeptics.
PayPal may be seen by many as the pioneer of this Bitcoin movement when it first announced its desire to allow the use of cryptocurrency on its platform back in October 2020. It, indeed, came through with its promise to allow its users the option to use some crypto coins as a means of payment.
With such developments underway, the availability of trading platforms, such as Bitpal app, has helped take crypto adoption to the next level. These platforms employ advanced technologies and powerful algorithms to help their users capitalize on short-term crypto booms that may occur as a result of the highly volatile nature of cryptocurrency. Due to the existence of these, many investors and traders feel more confident when trying out their luck in the crypto space.
Square is another financial payments giant that jumped aboard the crypto bandwagon late last year when it declared it has invested $50 million in Bitcoin. However, the company didn’t stop there and continued to increase its stake in Bitcoin with an additional $170 million investment in February. MasterCard has also announced its plans on bringing crypto onto its network by the end of this year. Visa isn’t falling behind either, opening its door to crypto payments in March.
The oldest bank in America, BNY Mellon, also has plans to dabble into Bitcoin. Such a decision has helped Bitcoin receive the much-needed validation to be recognized in the financial industry.
Some other big names that have stumbled into the crypto market as well include the $8 trillion asset manager, BlackRock, and the business analytics and mobility platform, MicroStrategy. In fact, MicroStrategy recently made a purchase of about 253 more of the leading cryptocurrency for $15 million in cash. This comes after it bought just over $1 billion of additional Bitcoin back in February.
But aside from these corporations that are merely accumulating digital currencies and assets, some have either plans to or have already integrated this digital asset into their operations with plans to use it in the long term. Visa, for example, has implemented a digital currency solution into its payment settlement layer, allowing its partners to settle payments in USDC.
Also, Bakkt, which is the digital currency custodian launched by ICE, has launched a digital asset marketplace that gives all digital assets increased interoperability and liquidity. Morgan Stanley also became the latest major player in this crypto game, making serious moves that have obtained the attention of many skeptics. It is all set to offer its wealth management clients access to Bitcoin funds.
Furthermore, the arrival of the US’s largest cryptocurrency exchange, Coinbase, on the Nasdaq on Wednesday pushed the crypto narrative even further with exposure to mainstream stock-market investors. Many crypto supporters view this move as a catalyst for further institutional adoption.
The future of these volatile digital assets remains fairly unknown but with the constant support pouring in from major corporations, many suspect that the crypto game is just about getting started.