The euphoria in the markets certainly plays a role, as investors pursue returns in an alternative investment at low interest rates. But a number of recent announcements have also made it clear that cryptocurrencies are entering a new phase of maturity as market participants treat them with increasing respect.
“I think the kinds of institutions that are starting to get into it now are talking a lot about acceptance,” Greg King, CEO of Osprey Funds, told me. Last week, his company launched the Osprey Bitcoin Trust, which aims to increase exposure for everyday investors.
“People are looking for value deposits,” said Rick Rieder, BlackRock’s chief investment officer of global fixed income, in a recent interview with CNBC. “We started to dig a little deeper into it.”
Bitcoin is by far the best option for professional investors targeting cryptocurrencies. But ether, the second largest cryptocurrency by market value, is also gaining general appeal.
The Chicago Mercantile Exchange, a leading derivatives market, launched ether futures in early February. Prices have risen since then.
King stressed that more work is needed as cryptocurrencies age.
“All these institutional instruments that make up the capital market ecosystem … which are still in very early stages for the cryptographic space,” he said.
On the radar: Most traditional market players continue to check bitcoin, assessing the liquidity of crypto markets and how they would respond to various shocks.
Deep skepticism remains. In a research report released last week, JPMorgan strategists called bitcoin a “secondary economic spectacle,” noting that cryptocurrencies “remain several times more volatile than underlying asset markets” and are still used almost exclusively for speculation rather than costs.
But it is difficult to challenge the direction of travel, given the events of last month.
“Growing digital finance and demand for fintech is the true financial transformation story of the Covid-19 era, not the rally of bitcoin prices,” JPMorgan said. “But recent announcements of greater acceptance and adoption by Tesla, BNY Mellon and Mastercard confirm increased investor demand and interest in trading payments in cryptocurrencies.”
Biden’s stimulus bill goes ahead
Most recently: the Committee on the Budget of the Chamber is taking steps to finalize the legislation so that it can proceed to a general vote. House Speaker Nancy Pelosi said she would like that to happen this week.
Blocking point: Democrats intend to pass legislation through a process known as reconciliation, which will allow approval in the Senate with just 51 votes. The Senate is divided 50-50 along the party line. Vice President Kamala Harris has the ability to intervene and act on an equal footing.
That means Democrats cannot afford to lose the support of even a single member of their party. And some moderate parliamentarians have made it clear that raising the $ 15 minimum wage does not support them.
Following the calendar: Pelosi said he expects the Covid aid package to be on Biden’s desk until March 14, when the current unemployment benefits expire. The clock is ticking.
It follows
Friday: India’s GDP; US personal income and expense data; DraftKings earnings