Bitcoin is now a $1 trillion asset. It is more valuable than Tesla and Facebook, And as of now, only six companies have higher market capitalizations than Bitcoin.
However, I am not interested in talking about Bitcoin’s “mad gains.” I want to talk about the dominating narrative behind Bitcoin in late 2020 and so far in 2021: increased institutional investment.
Before I do, here is a small primer. What exactly is Bitcoin? Well, according to Lily, a 3-year-old who is also a bitcoin HODLer, “Bitcoin is digital money.” I couldn’t have put it better myself!
Institutions Hooked On Bitcoin
As far as institutions are concerned, Bitcoin has jumped from undesirable to undeniable. A few years ago, some of the biggest names in finance were dismissing Bitcoin as a scam. Warren Buffet went so far as to label it as “rat poison squared.” JP Morgan also jumped on the Bitcoin hate train and labeled it a scam. JP Morgan has since changed its tune and is now expecting the price of Bitcoin to rise as high as $130,000, labelling it “digital gold.” They have since created a “Cryptocurrency Exposure Basket” of Bitcoin proxy stocks.
Tesla and Elon Musk have been dominating the headlines because of their $1.5-billion investment in Bitcoin, and they are now accepting Bitcoin as a payment method for Tesla vehicles. Before that, MicroStrategy, the largest independent, publicly traded business intelligence company, had purchased more than 90,000 BTC.
In mid-December 2020, UK-based asset manager Ruffer announced that it had accumulated £550M worth of bitcoin in a cumulative investment since November, allocating 2.7% of the company’s portfolio to bitcoin. In addition, BlackRock, the world’s largest asset manager, also announced that it has “started to dabble” in Bitcoin.
Bitcoin is considered a potential hedge against global economic instability, but as Tyler Winklevoss said, the opportunity lies in being an early adopter.