Bitcoin staged an impressive rally yesterday, gaining more than 10% in trading. What’s behind this latest BTC surge? We take a look.
Bitcoin
BTC reaches $55,000
It was good news for Bitcoin traders last night when the world’s most popular cryptocurrency cleared $55,000 for the first time since May.
The token bounced on the news that billionaire George Soros’ hedge fund confirmed it is trading BTC.
Bitcoin reached a five-month high of $55,499 last night. It has fallen back to around $54,680, but bulls believe it’s only a matter of time before BTC reaches a new all-time high. Its highest levels were reached in April 2021, when Bitcoin broke above $64,000 for the first time.
Whenever Bitcoin moves it usually takes other tokens with it. This is true today. Ether, for instance, is trading up nearly 1% at $3,594, while Cardano is showing similar growth of 1.10%. Cardano is now trading for $2.26.
It appears the China crypto crackdown has not had the effect that bears were bracing for. Beijing has ruled all cryptocurrency transactions as illegal and is doing its utmost to stamp out mining and trading operations across China.
However, it seems Bitcoin is showing new levels of resilience to potentially damaging external factors.
Extra support for Bitcoin
In addition to the Soros Fund’s Bitcoin backing, a number of other institutions, organisations, and even a country potentially, are helping support the token.
For instance, Reuters reports that the Bank of America Corp published its first research coverage focused on cryptocurrencies and other digital assets on Monday. Additionally, US Bancorp has launched a new crypto-focussed service for private fund managers in the US and Cayman Islands.
“Investor interest in cryptocurrency and demand from our fund services clients have grown strongly over the last few years,” said Gunjan Kedia, Vice Chair of US Bank Wealth Management and Investment Services in a news release. “Our fund and institutional custody clients have accelerated their plans to offer cryptocurrency.”
We’ve also had reports from the SEC that it doesn’t plan to ban cryptos at all. Chairman Gary Gensler was grilled by the Senate on Tuesday if the Securities and Exchange Commission would be mirroring China’s recent harsh actions. The answer was an emphatic no. It’s really for Congress to decide, according to Gensler.
Federal Reserve Chairman Jerome Powell recently also said the Fed has no intention of implementing a crypto ban either.
Regulation will likely be the name of the game. We just don’t know when it’s going to land, but for now digital token trading and investing is still A-OK in the US of A.
Bitcoin might even become currency in Brazil if comments made by Federal Deputy Aureo Riberio on Tuesday are anything to go by.
Riberio said in an interview with local media Brazilians could soon be able to use Bitcoin to buy houses, cars, and even fast food. Bill 2.303/15, which regulates cryptocurrencies, might approve the legal use of the asset, similar to El Salvador.
Not everyone is convinced by digital tokens
This new wave of digital finance fever has been tempered somewhat by a few important dissenting voices.
At the start of the week, we saw one of South Africa’s top hedge fund managers, Jean-Pierre Verster of Protea Capital Management, compare Bitcoin to a Ponzi scheme.
Now, JPMorgan CEO Jamie Dimon has spoken out against Bitcoin.
Dimon was interviewed on HBO’s Axios on Monday when he was asked if BTC is the “fool’s gold of the future?”.
The JPMorgan Boss replied: “It’s got no intrinsic value, and regulators are going to regulate the hell out of it.”
Dimon went on to say: “You can call it a security or an asset or something like that, but if people are using it for tax avoidance and sex trafficking and ransomware, it’s going to be regulated, whether you like it or not. So, it’s not a moral statement. It’s a factual statement.”
Several prominent finance figures have made their anti-Bitcoin stance very clear. Christine Largarde of the European Central Bank and Bank of England Governor Andrew Bailey have all spoken out against digital tokens.
Even Jerome Powell, who as mentioned above said the Fed has no plans to ban crypto transactions in the US any time soon, has mirrored Dimon’s comments in the past.
Despite its CEO’s feelings, JPMorgan currently offers six crypto funds for its customers.
FR
