Market-ravaged euphoria certainly plays an important role, as investors chasing returns in a low-interest world invest alternatives. But a series of recent announcements has also made it clear that cryptocurrencies are entering a new phase of maturity as market participants treat them with increasing respect.
“I think the kind of institutions that are now starting to get into it talk 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 stores,” said Rick Rieder, BlackRock’s global fixed income investment director, in a recent interview with CNBC. “We’ve started to dedicate ourselves a little bit.”
Bitcoin is by far the top choice for professional investors considering cryptocurrencies. But ether, the second largest cryptocurrency by market value, is also gaining appeal.
The Chicago Mercantile Exchange, one of the major derivatives markets, launched futures on ether in early February. Prices have risen since then.
King stressed that more work is needed as cryptocurrencies reach adulthood.
“All of these institutional-caliber tools that make up the capital markets ecosystem … that are still in very early stages for the cryptographic space,” he said.
On the radar: Most traditional market players continue to examine bitcoins, assess the liquidity of crypto markets, and how they would respond to various shocks.
There is a deep skepticism. In a research report released last week, JPMorgan strategists called Bitcoin the “economic side,” noting that cryptocurrencies “remain several times more volatile than underlying asset markets” and that they use almost exclusively to speculate and not spend.
But it is difficult to discuss the direction of the trip given the events of the last month.
“Rising digital finance and the demand for fintech technology is the real story of the financial transformation of the Covid-19 era, not the rise in bitcoin prices,” JPMorgan said. “But recent announcements of greater acceptance and adoption by Tesla, BNY Mellon and Mastercard confirm the increase in demand and investor interest in the cryptocurrency payment transaction.”
Biden’s stimulus bill is moving forward
The last one: the House Budget Committee is taking steps to finalize the legislation so that it can go to a general vote. House Speaker Nancy Pelosi said she would like this to happen this week.
Critical point: Democrats plan to pass legislation through a process known as reconciliation, which will allow approval in the Senate with just 51 votes. The Senate is divided between 50 and 50 according to the party line. Vice President Kamala Harris has the ability to intervene and act as a tiebreaker.
That means Democrats cannot afford to lose the support of not a single member of their party. And some moderate lawmakers have made it clear that raising the $ 15 minimum wage does not have their support.
Seen on schedule: Pelosi has said he expects Covid’s aid package to be on Biden’s table on March 14, when current unemployment benefits expire. The clock passes.
Until next time
Friday: India’s GDP; Data on U.S. personal expenses and income; DraftKings Earnings