Retail traders carried the 2017 price rally while institutional players kept their safe distance citing high volatility and less maturity as an asset. However, within 4 years that perspective has changed drastically and the same critics now seem to be convinced that Bitcoin is the future. Most of the financial giants and asset management firms such as JP Morgan and BlackRock who once called bitcoin a Ponzi scheme seem to have changed their minds and now believe Bitcoin could potentially replace Gold because of its technical superiority. BlackRock CEO Laurence D. Fink who once claimed that bitcoin is a money-laundering tool now belive it could well transform into a global market. He recently said,
“Bitcoin has caught the attention and the imagination of many people. We look at it as something that is real. Can it evolve into a global market? Possibly.”
The Giants Can’t Get Enough of Bitcoin
PayPal started offering buying and selling of bitcoin along with 3 other cryptocurrencies, opening the gates to its 283 million customers and many believe the decision by the payment processing giant triggered the ongoing price rally. The CEO of the company Daniel Schulman over the past week has claimed that a majority of their customers on their platform do not want to handle cash anymore and the time is just right for Bitcoin to go mainstream.
MicroStrategy, a software giant decided to convert a portion of its treasury into Bitcoin back in August and they bought nearly $500 million worth of Bitcoin in a series of purchases. However, the business solution provider seems to have realized the true potential of the scarce digital asset and recently raised another $650 million through debt security offering for buying more bitcoin. MicroStrategy now holds over $1 billion worth of bitcoin on their sheets and they are not the only ones. In fact, more than 10 publically traded companies own bitcoin on their sheets.
List of publicly traded companies that now hold #Bitcoin:
Galaxy Digital Holdings
Hut 8 Mining Corp
Voyager Digital LTD
Riot Blockchain, Inc.
Bit Digital, Inc.
Coin Citadel Inc
BIGG Digital Assets Inc.
— Bloqport (@Bloqport) December 10, 2020
Michael Saylor, CEO of MicroStrategy has claimed that the decision to convert their treasury asset into bitcoin was a well thought out plan since the value of cash is deteriorating all around the globe. According to him, Bitcoin is one true investment-grade safe-haven asset that would become a choice of treasury asset for many companies in the future.
Every investor is in danger of losing their wealth due to the great monetary inflation. We all need a Store of Value that is not based on fiat. #Bitcoin is The Solution – an investment grade, safe haven, treasury reserve asset. #BTC is our best https://t.co/Rvf2JvyHMb.
— Michael Saylor (@michael_saylor) December 11, 2020
MicroStrategy is not the only firm that sees Bitcoin as an inflation hedge, a 170-year old insurance firm MassMutual Insurance with over $235 billion portfolios just invested $100 million in bitcoin. Square Inc. a payment venture by Jack Dorsey, Grayscale, and many others are currently buying bitcoin in bulk.
Bitcoin is Currently Highly Undervalued
Bitcoin’s demand in the present market is too high and easily overshadows the supply as financial giants are buying more bitcoin than being produced every day by the miners. However, the price of bitcoin does not really reflect the growing demand, this is the reason many analysts believe that Bitcoin is highly underpriced at the moment. A Citibank analyst has predicted bitcoin price to soar past $300K by the end of 2021.
Alaster Milne, a popular Bitcoin investor, and analyst wrote,
“Grayscale buying >100% of mined supply, MicroStrategy buying, Square users buying, hedge funds buying, PayPal users buying…. … and the #Bitcoinprice isn’t at all-time highs?”
Plan B another well-known bitcoin proponent famous for his stock-to-flow charts has predicted a 5-figure price within 2 years of the halving and looking at the current growing institutional FOMO the price figure looks quite possible. The popular analyst has claimed that the bitcoin supply shortage would soon hit the market and the price would see a major uptick once we go past the $20,000 mark. Plan B in his latest tweet quoted Satoshi Nakamoto, the pseudo-anonymous founder about how bitcoin if made sense to enough people would turn into a “self-fulfilling prophecy.”
“It might make sense just to get some [#bitcoin] in case it catches on. If enough people [and companies] think the same way, that becomes a self fulfilling prophecy.” – Satoshi Nakamoto https://t.co/6tlXNIUYgP
— PlanB (@100trillionUSD) December 12, 2020
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