The B Word Conference hosted financial and technology leaders who were overwhelmingly optimistic about the future of Bitcoin. Large financial institutions continue taking on Bitcoin exposure. Legislators are drafting cryptocurrency regulations which add clarity, as well as frictions, to cryptocurrency markets.
Technology and Finance Industry Leaders Discuss Bitcoin
Elon Musk, Cathie Wood, and Jack Dorsey discussed all things Bitcoin at The B Word Conference, an event focused on exploring ways institutions can benefit from Bitcoin. Musk stated that SpaceX holds bitcoin on its balance sheet and that he owns bitcoin directly as well. Musk added that “Tesla will most likely resume accepting bitcoin” once he confirms that at least 50% of mining is done with renewable energy. Wood believes that companies should consider adding bitcoin to their balance sheets, and urged the Financial Accounting Standards Board to revise its classification of bitcoin to make the accounting implications of holding bitcoin more compelling to investors. Wood also stated that Ark Invest increased its allocations to GBTC, Coinbase, and Square. Jack Dorsey said Bitcoin was “hugely important to Twitter” and wants the company to “invest aggressively in it.” Last week, Dorsey announced the creation of a new bitcoin wallet business in Twitter's portfolio. In addition, Thomas Peterffy, Founder and Chairman of Interactive Brokers, announced that he holds some cryptocurrency due to the asymmetric upside of the investment.
Financial Institutions Take On More Bitcoin Exposure
Cryptocurrency exchange FTX raised $900 million at an $18 billion valuation from SoftBank, Sequoia Capital, and Third Point, among others. Core Scientific, one of the largest providers of blockchain infrastructure in North America, will be going public via SPAC at a $4.3 billion valuation. Comdirect, one of the largest German direct banks, is now offering 11 cryptocurrency exchange-traded products to its three million customers. Rothschild Investment Corporation increased its allocation to GBTC by 141,405 shares, giving the firm roughly $4.2 million in Bitcoin exposure. BNY Mellon and State Street are among the six banks backing cryptocurrency exchange Pure Digital. JPMorgan is giving all wealth management clients access to their cryptocurrency funds. Convenience store chain Circle K will be adding Bitcoin ATMs to thousands of locations through a partnership with Bitcoin Depot.
New Bitcoin Regulation Is Introduced
The European Commission proposed a new rule requiring companies that support cryptocurrency transactions to collect details on the sender and the recipient, including name, address, and date of birth. This rule would only take effect if approved by EU States and the European Parliament, which may be a multi-year process. New Jersey issued a cease and desist against BlockFi’s interest bearing accounts, claiming that the product is an unregistered security. Janet Yellen told regulators to “act quickly” in establishing legal frameworks for stablecoins during a meeting which included the President’s Working Group on Financial Markets, the Office of the Comptroller of the Currency, and the Federal Deposit Insurance Corporation. Yellen’s sense of urgency was exacerbated by the fact that the market is “growing incredibly fast.” SEC Commissioner Hester Peirce reiterated her desire to get a U.S. Bitcoin ETF approved as quickly as possible, while over a dozen ETFs are currently pending approval.
Market Recap
The B Word provided Bitcoin markets a boost, largely due to Elon Musk being more optimistic about the currency than expected. Large banks continue expanding their offering of bitcoin products to their client base. Regulators in both European and U.S. markets are cracking down on many cryptocurrency-related activities.