In recent years, cryptocurrencies have made all other assets look old and boring in direct comparison. More and more well-known brands are entering the cryptocurrency market. Even when there are many good reasons to stay away from all cryptocurrencies, since it's a risky investment.
Traditional investors, who usually buy stocks, bonds, funds or derivatives are taking notice of the great possibilities of cryptocurrencies and are looking for indirect ways to invest in this new market.
In the U.S. in particular, we've seen a big push over the past year. The year 2021 is shaping up to be the start of a lot of institutional interest in bitcoin.
So let's take a look at all the meeting points of Bitcoin (upcoming only BTC) and the Wall Street.
Banks, insurance, investment + asset companies
JP Morgan, is issuing its own price target for BTC, which stands at more than $146,000.
Massachusetts Mutual Life Insurance - a nearly 170-year-old insurance company - is one of the latest institution to invest into BTC. The financial services company just took a $100 million position in the digital asset.
Fidelity Investments - itself one of America's largest asset managers and a very well known names - started building its own BTC wing years ago, and so far offers BTC investments for particularly well heeled clients.
Even the CIO of Blackrock stated in an interview that BTC could replace gold as a store of value, a thesis normally only heard from hardcore BTC fans.
The fact that Blackrock - the largest asset manager in the world - has revised its previously negative opinion of BTC and wants to enter the market is interpreted by many as a sign to directly or indirectly enter the crypto market financially.
MicroStrategy
MicroStrategy - a tech company, which normally provides enterprise software - invested in August 2020 $250 million in BTC, citing declining returns on cash, a weakening dollar, and other global macro economic factors. The company made several more large purchases of BTC later the same year.
In total, the company spent $1.125 billion on nearly 70,500 BTC in 2020, with an average purchase price of about $15,964 per Bitcoin.
MicroStrategy's shares the exploded in response - because it's an easy way to invest indirectly in BTC. Tech entrepreneur Michael J. Saylor was the main driver behind this strategy.
PayPal
The interest and support of payment service provider PayPal has not only given BTC a boost - but also the company's stock. Paypal is active in 202 markets and more than 305 million active registered accounts worldwide use the sevice.
In October 2020, PayPal announced a new service that will allow customers to shop with cryptocurrencies at 26 million merchants on its network starting in 2021. As part of the announcement, they secured the first conditional cryptocurrency license from the New York State Department of Financial Services, allowing customers to purchase cryptocurrencies such as Bitcoin, Litecoin, Ethereum and Bitcoin Cash.
PayPal benefits twice over. Selling coins to customers is a new business model. The user base of BTC & Co. is increased, which tends to drive the price - and thus the value of the company, which raises the share price. In addition, many fund managers, who are subject to strict rules, are looking for another indirect way to invest in BTC.
Grayscale Bitcoin Trust
One of the biggest regular buyers of BTC is the Grayscale Bitcoin Trust. The name says it all, it's basically a fund that buys bitcoin - and investors can buy shares in this fund. You can compare it to a BTC ETF, but those who buy from Grayscale pay handsomely.
In November 2020, there was a milestone: for the first time since its launch seven years ago, the investment product has more than 500,000 BTC in assets. Fees are high and the fund is trading well above the current BTC price because demand is so high. The fund's investment volume has exploded from about $2 billion to more than $20 billion in 2020. To satisfy investor interest, Grayscale must buy up more and more Bitcoin.
Tesla and Elon Musk
Of course, nobody should forget our all loved Elon Musk of TESLA and Space-X fame, which started the latest rally pumping BTC price to an interim of $38.000 just because he has changed his Twitter bio to Bitcoin.
After the BTC price had already recorded a steady upward trend to as high as 34,400 in late January of this year, what followed is already written down in the Bitcoin history books:
The BTC price exploded by $6.000, however, the rise was by no means the infamous r/WallStreetBets group, but the richest man in the world: Elon Musk. The Tesla founder changed his Twitter bio to "#Bitcoin." Only a short time later, the pump started and Crypto Twitter celebrated the day as the beginning of a new era. Even though it was not 100% clear if Elon Musk bought Bitcoin, the crypto community suspected just that.
At the end of the story, Musk announced, that Tesla has bought $1.5 billion worth of bitcoin.
Who's gonna be the next big fish?
Timothy Maxwell Keiser wants to know who the next big spender will be and told Tuesday on twitter, that the "[n]ext big corporate #BTC buyer is Larry Ellison, Oracle".
Max Keiser - known to the public through the program The Oracle with Max Keiser on BBC World News - now working as a presenter for the television channels Russia Today, Al Jazeera English and publishes in The Huffington Post. He is the inventor and holder of U.S. patents describing a computerized trading system for derivatives that reduces the volatility of smaller markets.
Co-founder of Oracle Larry Ellison - American investor, a member of Tesla's board of directors since December 2018 and the company's second-largest shareholder after Elon Musk - is set to follow in Musk's footsteps in the near future.
As Kaiser reports, Oracle, just like Tesla, could aim for an investment in Bitcoin.
Also a little advice: please don't go to Keiser's twitter. Flashing warning + advertisment and no love for god, only himself.
You can still lose money with crypto and not just on the Wall Street
Both the new US Treasury Secretary Janet Yellen and ECB chief Christine Lagarde have recently been critical of Bitcoin and warned against money laundering. So please never forget: There are still many voices warning about the risk with investing into cryptocurrencies. Even bank analysts contradict each other. You can lose all your money as fast as you have invested it.
It's like in "Margaritaville" the 3rd episode of the 13th season of the American animated television series South Park. Your money is transferred from your bank account into a crypto portfolio and the website says: "Aaaand it's gone!"
Resources
https://beincrypto.com/massachusetts-mutual-invests-100-million-in-bitcoin-through-nydig/
https://www.bizjournals.com/washington/news/2020/08/11/microstratregy-buys-250m-in-bitcoin.html
https://www.reuters.com/article/paypal-cryptocurrency/idINL1N2HB14U
https://www.investopedia.com/news/why-buy-expensive-bitcoin-etf-instead-actual-bitcoin/
https://www.cnbc.com/2021/02/08/tesla-buys-1point5-billion-in-bitcoin.html
