Last week we heard about big banks dipping their toe into crypto, patents awarded to unique E-sports and video-streaming protocols, and more merchants allowing bitcoin payments, like Tesla. This week in crypto was no different, with headlines from Goldman Sachs, JPM Chase, Morgan Stanley, Visa, Microsoft, and others. One of the coins mentioned in my last post, Verasity (VRA), saw its price rise +100% between then and now, but everyone is a genius in a bull market.
The price of Bitcoin rose +9.9% this week, to a high just above $60,000. Bitcoin’s price rose +28% through the month of March 2021, bringing its gain since January to +109%. Ethereum, up +188% YTD, rose +24% this week, making a new all-time high above $2,000 (I bought more ETH). Both Bitcoin and Ethereum outperformed every major asset class, including stocks, bonds, a “balanced” portfolio, and the U.S. Dollar for the week and month (and year), again.
Big Banks
In the seven years from 2008 to 2015, the Fed’s balance sheet grew from basically nothing to about $3.5 trillion. Fast forward to April, 2021… in the one year since the start of the COVID19 lockdowns, from March 2020 through today, the Fed has added another $3.5 trillion to their balance sheet.
Wall Street dissed bitcoin for years while simultaneously building the infrastructure to support it behind closed doors. This week Goldman Sachs announced that it will begin offering Bitcoin and other digital assets to private wealth management clients by Q2 ’21.
According to JPMorgan Chase & Co., Bitcoin’s will continue to attract institutional interest. JPM analysts cited $7 billion of inflows into Bitcoin funds and $20 billion of outflows from Gold funds, and placed a long-term price target of $130,000, “if the volatility can converge with that of gold.”
Big Business
From January – March 2021, blockchain focused startups raised $2.6 billion, and that’s more than they raised in all of 2020 ($2.3 billion). The leading startups include BlockFi, Dapper Labs, and crypto wallet provider Blockchain.com. I use BlockFi myself for staking my ethereum, and I’ve earned an annualized interest rate of 20% so far, paid in ETH (which made a new all-time high this weekend).
Last week I mentioned Microsoft’s new identity platform on the Bitcoin network. In what sounds more like a storyline from the Matrix (one of my favorite movies) than real life news, this week we learned that Microsft filed for a patent for, “generating cryptocurrency by monitoring people’s brain activity and other personal biometric data.” What? Included in the patent filing is the example of, “A brain wave or body heat emitted from the user when performing tasks provided by an information provider, such as viewing an advertisement or using certain internet services…”. So, things are getting weird. Moving on…
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Coinbase, the largest U.S. crypto exchange, announced that it will IPO on April 14, 2021, after its original date in March was pushed back. Things will be interesting for Coinbase as the IRS decides how to handle crypto taxes. The company was valued at about $90 billion in its final week of trading on Nasdaq’s private market. In addition to its exchange business, Coinbase operates a digital custody business for institutional (big money) clients.
Paypal has started allowing U.S. consumers to use cryptocurrency to pay at millions of its online merchants globally in a move that could significantly boost the use of digital assets in everyday commerce (Reuters).
In another sign of growing acceptance of digital currencies by the mainstream financial industry, Visa announced that it will allow the use of crypto on its payment network. Visa has been hinting at a move into crypto for years now. In 2018, I noticed one of their job listings on Indeed seeking someone with experience in bitcoin and blockchain. See Visa CEO talk bitcoin in post #16.
What did I miss this week in crypto? Leave a reply below or sign up to gain an edge on investing in the future.
*Nothing here is investment advice.* I hold positions in mentioned securities.* Do your own research.* Investing in cryptocurrencies, stocks, bonds, or anything else entails significant risk of loss.*
#jk