The fact that more and more financial services are choosing Bitcoinhas resulted in its value increasing, with the cryptocurrency closing at $50,000 for the first time, before falling again.
A week after Tesla announced it had invested $1.5 billion in Bitcoin, the digital currency continues to make inroads into traditional finance, with news circulating that a Morgan Stanley investment unit is considering betting on Bitcoin. Canada has also approved North America’s first Bitcoin exchange-traded fund.
And there are signs that more Wall Street firms are starting to add services for cryptocurrencies, which are still somewhat controversial. On Thursday, BNY Mellon said it has created a new team developing a custody and management platform for traditional and digital assets. Mastercard Inc. said it will start allowing cardholders to transact in certain cryptocurrencies on its network.
Recent announcements from billionaire Elon Musk and energy banks have given a new boost to Bitcoin’s value. The cryptocurrency neared $50,000 over the weekend before falling back. Prices are up about 40% since February and were around $46,800 as of 11 a.m. in Hong Kong on Monday.
“The key to Bitcoin going higher is to gain more corporate approvals,” said Edward Moya, senior analyst at OandaCorp.
Of course, there is a heated debate about whether Bitcoin is a legitimate asset with any real purpose or value. It has often been implicated in money laundering and fraud , and recently Nassim Nicholas Taleb , author of “ The Black Swan ,” said he would “dump” his Bitcoin. A currency should never be more volatile than what you buy and sell with it, Taleb said on Twitter , adding that products cannot be priced in cryptocurrencies .
However, the price trend has increased and Bitcoin is yet another example of speculative excesses that are defining the market.
There are indications that more big Wall Street firms could be turning to the cryptocurrency market. In an interview with CNBC, JPMorgan Chase & Co. President Daniel Pinto said that client demand isn’t there yet for Bitcoin, but he’s confident that will change.
Bloomberg reported that Counterpoint Global, a unit of Morgan Stanley Investment Management, is exploring whether cryptocurrencies would be a suitable option for its investors. Moving forward with the investments would require approval from the company and regulators.
“ With every major announcement like the one made by BNY Mellon, other institutions are pushing for faster adoption and development of digital assets ,” said Patrick Campos , chief strategy officer at Securrency , a developer of blockchain- based financial and regulatory technology .
“Tesla’s recent announcement will encourage other major companies and institutions to embrace crypto not only as a worthwhile asset class, but perhaps even as a meaningful one,” he said.
