Bitcoin continues to perform well, smashing through the $50,000 price point on the way to new record highs around $58,000. The price movement comes as Canada launches a Bitcoin ETF, which has received significant investor activity. Institutional Bitcoin adoption progresses as BlackRock discloses that the firm has “started to dabble” in Bitcoin investments, and MicroStrategy raises over $1 billion in debt to fund additional bitcoin purchases. The $1.9 trillion stimulus package has also gained traction in congress.
North America’s first Bitcoin ETF increases investors options to gain Bitcoin exposure
Bitcoin continues to push new all-time highs after breaking $50,000 earlier this week. At the time of writing, the currency was trading around $53,000, below the new all-time high of $58,332.36. Bitcoin broke its previous all-time high of $20,000, from late 2017, just two months ago. Bitcoin’s market capitalization is now over $1 trillion, roughly 10% of gold’s market capitalization. In addition, Bitcoin markets were given a liquidity boost with the launch of North America’s first Bitcoin ETF on Thursday. Purpose Bitcoin ETF, which is trading on the Toronto Stock Exchange, had $165 million in volume during its first day of trading.
BlackRock gets involved in Bitcoin and Jeffrey Gundlach makes Bitcoin-positive statement
Rick Rieder, CIO of Global Fixed Income at BlackRock, confirmed that BlackRock has “started to dabble” in Bitcoin. Rieder stated that the investment management company was looking to “diversify into other assets” in order to hedge against fixed income instruments. NYDIG, who recently filed to launch its own Bitcoin ETF, stated that it currently has $6 billion in Bitcoin assets under custody, and expects this number to be closer to $25 billion by the end of 2021. Last week, MicroStrategy raised $1.05 billion in an offering of senior convertible notes, with a stated purpose of buying bitcoin with the proceeds. The notes have a 0% coupon and are due in 2027. Meanwhile, investor Jeffrey Gundlach says Bitcoin “maybe the stimulus asset”, not gold, reversing his previous position on the currency.
$1.9 Trillion stimulus package pending approval in Congress as the unemployment rate grows
Janet Yellen vocalized her support for the $1.9 trillion stimulus package, which is pending approval from congress. Yellen stated that getting unemployment back to normal levels is her primary goal and that the US “has tools to deal with” the potential inflation associated with the additional spending. Yellen’s comments come as the United States approaches record levels of long-term unemployment set during the Great Depression. Meanwhile, the unemployment rate increased slightly in February, up from the post-COVID lows in January.
Demand for Bitcoin soars in Nigeria while the government attempts to ban the currency
Nigeria continues to see high demand from citizens who have lost faith in the local currency. While the Nigerian government has taken steps to limit the use of Bitcoin, Bitcoin traded as much as 35% higher than global averages on Nigerian exchanges last week, due to the persistent demand and increasingly scarce supply.
Bitcoin’s consistent price appreciation is supported by a steady growth in institutional support and investment. The world’s largest wealth managers continue finding ways to use Bitcoin exposure to improve their portfolios. Simultaneously, the widespread use of Bitcoin as a substitute for local currency in Nigeria reaffirms Bitcoin’s value as a decentralized currency.