Few themes have come to define the current surge in capital investment and asset prices – and the culture around this bull market – like the cryptocurrency space.
The explosion higher in the price of Bitcoin gains most of the attention, but the larger theme is much bigger than just Bitcoin. A new concept of money and of transacting value is emerging, and it is gaining traction with increasing legitimacy driven, in large part, by the attachment of brands and influential supporters.
This group now includes, Tesla, Cathie Wood, Square, PayPal, MicroStrategy, and major Wall Street firms such as Goldman Sachs and JPMorgan.
Cryptocurrency s Expansion Garners Institutional Attention
FinancialBuzz.com News Commentary
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NEW YORK, March 9, 2021 /PRNewswire/ A cryptocurrency is a digital asset designed to work as a medium of exchange wherein individual coin ownership records are stored in a ledger existing in a form of computerized database. The database uses strong cryptography to secure transaction records, to control the creation of additional coins, and to verify the transfer of coin ownership. The first decentralized cryptocurrency, bitcoin, was created in 2009. Now, the burgeoning popularity of cryptocurrencies has resulted in major financial institutions, like banks, paying attention to developments in the crypto market. In addition, fin-tech companies are now stepping into the arena. For example, PayPal, recently announced plans to acquire Curv, a cryptocurrency startup based in Tel Aviv, Israel. In October 2020, PayPal announced its commitment to help shape
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Higher gold causes gold mining and exploration companies to soar, often outperforming the yellow metal’s price. In agricultural commodities, rising grain and soft commodity prices often cause fertilizer and agribusiness equipment company shares to explode higher. Over the past months, rising commodity prices have taken many pick and shovel stocks to highs because of increasing inflationary pressures.
Marathon Patent Group, Inc. (MARA) has become a pick and shovel play on Bitcoin and the other over 8600 members of the asset class in the burgeoning digital currency world. MARA shares have exploded over the past weeks and months as Bitcoin futures rose to their record $58,610 peak in February.
As we have noted, the argument for or against Bitcoin comes down to future prospects for legitimacy as a currency system. The “store of value”, “speculative asset”, and “diversification” arguments are all second-order pathways contingent upon its ability to establish itself as a legitimate, mainstream medium of exchange with widespread network-effect legitimacy.
But, ironically, that legitimacy may ultimately depend on its acceptance in financial asset terms.
Hence, the future is looking pretty bright today as the odds of that acceptance appear to be back on an upward trajectory as the CBOE Global Markets Inc. disclosed this week that it is seeking approval to list and trade shares of what could be the first Bitcoin exchange-traded fund in the U.S., according to a regulatory filing that hit on Monday.