This article provides an update (as of 12:00 UTC on 16 February 2021) on the current state of the Bitcoin markets, as well on the latest thinking on Bitcoin by influential crypto analysts, investors, traders, and other thought leaders.
According to data by TradingView, on crypto exchange Bitstamp, Bitcoin traded in the range $46,100 and $49,015. As for today (February 16), the Bitcoin price almost broke through the $50,000, reaching as high as $49,850 at 04:15 UTC.
Almost hitting $50,000 was great, but obviously not as good as actually breaking $50,000. Well, this happened just moments ago. At 12:32, the Bitcoin price reached $50,500, setting a new all-time high.
According to data by CryptoCompare, currently (as of 12:37 UTC), BTC-USD is trading around $50,198, which means that Bitcoin’s market cap stands roughly at $935 billion. Bitcoin is up 4.65% in the past 24-hour period and 73.26% in the year-to-date (YTD) period.
Ever seen February 8, the day Tesla disclosed in its latest annual report for the U.S. Securities and Exchange Commission (SEC) that it had invested $1.5 billion in Bitcoin, everyone was impatiently waiting for Bitcoin to break $50K. So, why did it finally happen today?
The most plausible reason seems to be Michael Saylor, CEO of MicroStrategy Inc. tweeting at 12:19 UTC that his Nasdaq-listed software firm has announced that “it intends to offer, subject to market conditions and other factors, $600 million aggregate principal amount of convertible senior notes due 2027 (the ‘notes’) in a private offering to qualified institutional buyers in reliance on Rule 144A under the Securities Act of 1933.”
“MicroStrategy’s plans to purchase a further $600 million in bitcoin marks the latest milestone in the growing trend of corporate and institutional adoption of bitcoin that is driving price to all time highs.
“This ongoing tightening of supply driven by significant purchases by corporations eying the long-term view comes at a time where friction for institutional investors to gain exposure to digital assets is rapidly reducing, creating a perfect storm for Bitcoin price appreciation.”
He also added:
“The recent $1.5 billion investment in Bitcoin by Tesla for use as a treasury reserve asset has further legitimised the inflation hedge narrative and the ‘store of value’ use case for Bitcoin. In doing so it has made it much more likely other corporations will follow suit as it is harder to look foolish after one of the world’s most successful entrepreneurs and innovative companies have made such a high profile commitment to Bitcoin.“
Last Tuesday (February 9), David Grider, Director of Digital Asset Strategy at independent research boutique Fundstrat Global Advisors, said that Fundstrat had raised their price target for Bitcoin from $40K to $100K (by year end 2021) and attached a slide from a Fundstrat presentation deck showing 20 reasons for being so bullish on Bitcoin.
“Companies disrupting the traditional world order – like $TSLA and $SQ – are wise to hedge their fiat reserves with $BTC. Other companies in harm’s way because of disruptive innovation should be investing their cash in new technologies to avoid creative destruction.“
Earlier this month, Wood said during an interview with Yahoo Finance that ARK Invest was not shocked by institutional investors’ move into crypto:
“We have been expecting institutions to start moving into Bitcoin and other cryptoassets, but primarily Bitcoin, the most secure of the blockchains, because if you look at the correlation of Bitcoin’s performance relative to any other asset class, it has the lowest correlation, meaning if you buy some Bitcoin, you will further diversify your portfolio and increase your returns with lower risk...
“Institutions look for that low correlation. Bitcoin has it. That’s clear. We have 10 years of history now.”
Yesterday (February 15), Mohamed Aly El-Erian, President of Queens’ College, Cambridge University, and Chief Economic Adviser at Allianz, talked about Bitcoin during an interview with CNN anchor Julia Chatterley.
He first explained that that investors were chasing the “rationality bubble”, i.e. they realize that asset prices are very high but they feel compelled to buy even at these price levels because they are worried about the risk of higher inflation brought on by the “massive” central bank liquidity injections we have already seen as well as “the real prospects of massive fiscal injections on top.”
With regard to companies (such as MicroStrategy, Square, and Tesla) that are buying Bitcoin for use as a primary treasury reserve asset, he said that these companies are doing so because “they don’t know how else to mitigate risk”, and furthermore, he expects more companies to come forward in the future to buy Bitcoin as an inflation hedge.
The views and opinions expressed by the author are for informational purposes only and do not constitute financial, investment, or other advice.