Summary
- Bitcoin’s appeal among institutional investors is on the rise, but skepticism remains among some institutions.
- Bitcoin shows improvements in ETFs and getting favorable perception within some legal jurisdictions.
Bitcoin kept up its momentum in Another Attempt to match towards $60,000. The cryptocurrency was trading at $58,260 at the time of going to press and was 0.7% lower than the price recorded a week ago. However, recent market action showed a potential break into $60,000.
Breaking into new territory
To promote the widespread use of BTC, a Japanese company, SBI Crypto has opened its Bitcoin mining service to the public. The company will host competitions among miners, who will solve encryption problems in return for BTC rewards.
In Brazil, the country’s Securities and Exchange Commission has approved the launch of a BTC Exchange-Traded Futures (ETF), thereby giving investors alternative exposure to the crypto-asset. This makes Brazil the second country to accept a Bitcoin ETF after Canada.
Bitcoin’s rising popularity as an ETF asset has also triggered similar attempts to launch ETFs in the United States. Investment firm VanEck has already made several attempts to launch a BTC EFT in the United States without success.
Recently, Cboe filed with the SEC to consider the proposal by VanEck. If given the green light, this would become the first Bitcoin ETF in the United States. However, the SEC is known to hold unfavorable views on cryptocurrencies and is currently embroiled in a legal tussle with Ripple.
Elsewhere, investment giant Morgan Stanley plans to take over Bithumb, a South Korean crypto exchange. The takeover has, however, been delayed by BTC’s recent volatility and disagreements among some owners. The looming takeover shows BTC’s increasingly rising appeal among institutional investors.
Bitcoin’s adoption among institutions has been paying off and more institutions are likely to join the fray. PayPal’s addition of Bitcoin to its platform has been a major contributor to its recent rally in the stock market, which led to an all-time high stock price of $309. The company’s increased revenue from crypto assets will likely result in significant profits.
In a move that may signify changing the perception of cryptocurrencies among authorities, Pakistan has launched plans to establish Bitcoin mining firms. The move will be on an initial pilot basis but is an indicator that governments have seen Bitcoin’s potential as an investment asset. The country also intends to revise its existing policies on digital currencies.
This week, leading Chinese app maker, Meitu revealed that it had added more Bitcoin to its inventory. The Hong Kong Stock Exchange-listed company now holds more than $90 million worth of digital assets, out of which Bitcoin accounts for $20 million.
Rising concerns and skepticism
In a not-so-rosy assessment of Bitcoin, analysts at Bank of America have opined that there is no good reason to own BTC unless prices are rising. In a recently-released report, they also highlighted Bitcoin’s high energy consumption, which they estimated could make Bitcoin the world’s fifth-largest carbon emitter if the price hits $1 million.
The report also derided BTC as too volatile, stating that only $93 million is needed to cause a 1% change in price compared to gold, which requires about $1.86 billion to make the same move.
Such unfavorable assessments of Bitcoin from mega-institutions are injurious to potential adoption by more institutions and may negatively affect BTC price.
Bitcoin fraud
Concerns continue to rise over the use of BTC to commit crimes and evade taxes. Graham Ivan Clark, the young hacker behind last year’s hacking of Twitter accounts belonging to firms, politicians, and celebrities to advertise a BTC scam, has been charged and sentenced to 3 years in prison. He was also sentenced to probation of 3 years after his release from prison.
BTC/USD technical outlook
Bitcoin will find support at $57,096 and will encounter the first resistance at $59,956. The Relative Strength Index (RSI) is above 50, indicating a mostly bullish trend. A bullish trend on the price could move the price higher, and a break past $59,956 will drive prices to a high of $61,189.
