The euphoria that sweeps markets certainly plays a role, as investors seek returns in a world of low interest in alternative investments. But a series of recent announcements has also made it clear that cryptocurrencies are entering a new phase of maturity, as market participants treat them with increasing respect.
“I think the types of institutions that are just starting to come in talk a lot about acceptance,” said Greg King, CEO of Osprey Funds. Last week, his company launched the Osprey Bitcoin Trust, which aims to increase exposure to ordinary investors.
“People are looking for value deposits,” said Rick Rieder, director of global fixed income investments at BlackRock, in a recent interview with CNBC. “We started to get a little bit involved in this.”
Bitcoin is by far the best option for professional investors looking for cryptocurrencies. But ether, the second largest cryptocurrency by market value, is also gaining popular appeal.
The Chicago Mercantile Exchange, a major derivatives market, launched ether futures in early February. Prices have soared since then.
King emphasized that more work is needed as cryptocurrencies mature.
“All these institutional tools of caliber that make up the capital market ecosystem … which are still in the early stages of the cryptographic space,” he said.
On the radar: most participants in the traditional market are still examining bitcoin, assessing the liquidity of the crypto markets and how they would respond to various shocks.
Deep skepticism remains. In a research report published last week, JPMorgan strategists called bitcoin an “economic show”, noting that cryptocurrencies “remain several times more volatile than major asset markets” and are still almost exclusively used for speculation and not for spending.
But it is difficult to challenge the direction of the trip, given the events of the past month.
“The rise of digital finance and demand for fintech is the true story of financial transformation in the Covid-19 era, not the rise in bitcoin prices,” said JPMorgan. “But recent announcements of greater acceptance and adoption by Tesla, BNY Mellon and Mastercard confirm the increased demand and interest from investors in cryptocurrency payment transactions.”
Biden’s stimulus project moves forward
The most recent: the House Budget Committee is taking steps to finalize the legislation so that it can move to a general vote. House Speaker Nancy Pelosi said she would like this to happen this week.
Point of contention: Democrats plan to pass legislation through a process known as reconciliation, which will allow Senate approval with only 51 votes. The Senate is divided 50-50 along party lines. Vice President Kamala Harris has the ability to step in and break the tie.
This means that Democrats cannot lose the support of even a single member of their party. And some moderate lawmakers have made it clear that the $ 15 minimum wage increase is not supported.
Looking at the calendar: Pelosi said he expects Covid’s aid package to be on Biden’s table by March 14, when current unemployment benefits expire. Clock is ticking.
Next
Friday: India’s GDP; US personal income and expenditure data; DraftKings earnings