The cryptocurrency nearly quadrupled, surpassing $ 20,000 for the first time as it recorded record after record. The unforeseen rejoiced him as a hedge of inflation in an era of unprecedented generosity from the central bank. Wall Street veterans, from Paul Tudor Jones to Stanley Druckenmiller, blessed it as an alternative asset, which was added to the rally. And companies like MicroStrategy Inc. and Square Inc. they moved cash reserves to cryptography in search of better yields than near-zero interest rates.
While none of these reasons to buy Bitcoin behave with its origins as an alternative to fiat currencies, they do point to a growing acceptance of crypto as its own asset class. And that makes the community, like a fanatic, make a new round of victory in its quest for legitimacy.
“What’s happening now – and it’s happening faster than anyone could have imagined – is that Bitcoin is moving from a marginal esoteric asset to mainstream,” said Matt Hougan, investment director at Bitwise Asset Management. “There is so much money on the sidelines that they will have to come in and establish a position that will leave me very bullish for 2021.”
But if Bitcoin attracts more attention, it could also gain more control from regulators, says Guy Hirsch, general manager of the United States on the eToro online trading platform. “Despite this meteoric rise, there are some storm clouds on the horizon,” he said, including the consequences of several last-minute actions by the outgoing Trump administration, among others.
Devotees say that somehow the pandemic-ravaged year proved the perfect environment for digital currency. Warnings about the printing of money by global central banks (some of which began to reveal their own interests in digital assets) sparked fears of eventual inflation, while interest rates dropped to lows. . This prompted some investors to pursue yields and hedge against cryptocurrencies, pushing their price beyond $ 28,000, from $ 7,200 in early January.
Predicting where it will go is a full exercise. Many left the coin dead after the 2017 rally resulted in a fall the following year, a period of time sometimes known as the “crypto winter”. But by 2020 it has risen more than 300% and many investors say it could continue to win According to Jim Reid, a firm strategist, a survey by Deutsche Bank found that most saw it ending in 2021 higher, with 41% of participants who projected a goal of between $ 20,000 and $ 49,999 and a 12% that crossed above $ 100,000.
What else is on the radar? For Meltem Demirors, strategy director of digital asset manager CoinShares, there are some concerns about what Joe Biden’s incoming administration could mean for the cryptographic space.
“Overall, I think we’ve had challenges with demos: they prefer more regulation, more oversight,” Demirors said. “I’m a little worried about the direction of things,” especially around antitrust lawsuits and the erosion of Internet privacy. . Still, the industry has some allies, Demirors said, including Patrick McHenry of North Carolina and Warren Davidson of Ohio, who she says have advocated preserving consumer financial privacy.
In the future, many strategists and investors say the industry could see stricter and stricter regulation with Biden in the White House.
Of course, much will depend on who holds the key positions in the administration. Janet Yellen, who has been appointed secretary of the Treasury in the Biden administration, has warned investors in recent years about Bitcoin, saying it was a “highly speculative asset” and “not a stable value store”. One representative did not immediately return any request for comment.
Meanwhile, Bloomberg News reported that Gary Gensler could be appointed to replace Jay Clayton on the U.S. Securities and Exchange Commission. Clayton’s exit from the regulator is good news for crypto enthusiasts who saw him take a hard line over the years, demanding to stop the initial supply of currencies, rejecting requests for traded funds in exchange for Bitcoin and filing a last-minute lawsuit against Ripple Labs Inc. Gensler. , who served as chair of the Commodity Futures Trading Commission during the Obama administration, is a senior advisor to the MIT Media Lab’s Digital Currency Initiative and teaches on blockchain technology and digital currencies.
According to Hirsch of eToro, there is uncertainty about how the Biden administration will approach cryptocurrencies, but the quotes are notable “because Yellen is famous anti-crypto and Gensler is known to be pro-crypto.”
“Without knowing how the authorities will try to regulate cryptography more robustly in the coming years, it is unlikely that markets will continue to grow at the same rate as now, especially if, as some fear, regulations aimed at slowing down innovation rather than encouraging they enact it, “Hirsch said.” Once again, clarity is the name of the game. “
This story has been published from a wireless agency channel without text modifications. Only the headline has been changed.