Bitcoin hits record as firms back crypto

Bitcoin hits record as firms back crypto

Bitcoin hits record as firms back crypto

DIGITAL ASSETS: Following support from Elon Musk, moves by Mastercard and BNY Mellon confirm a fundamental shift to cryptocurrencies, an Oanda analyst said

Bloomberg

Bitcoin jumped to a record high after Mastercard Inc and Bank of New York Mellon Corp moved to make it easier for customers to use cryptocurrencies.

The largest digital asset rose as much as 8.1 percent to US$48,663, surpassing the all-time high reached on Monday after Tesla Inc announced it would hold US$1.5 billion of the cryptocurrency on its balance sheet.

“Bitcoin appears to be in a near-perfect storm for higher prices, and Tesla has helped solidify about US$50,000 as the next whole number resistance target,” said Mike McGlone, a Bloomberg Intelligence commodity strategist.

Mastercard singled out so-called “stablecoins,” which often peg their value to that of another asset, such as the US dollar. Mastercard has already partnered with crypto card providers such as Wirex and BitPay, but has required digital currencies to be converted into fiat before processing payments for transactions on its network.

Bank of New York Mellon Corp said on Thursday it will hold, transfer and issue bitcoin and other cryptocurrencies for institutional customers. Interest in cryptocurrencies has accelerated yet again as Tesla CEO Elon Musk, the world’s richest person, emerged as a central figure for the crypto faithful, supporting arguments among proponents that Wall Street and the mainstream are becoming more receptive to the asset class. Detractors maintain speculators are behind bitcoin’s rise and the bubble will once again burst.

Mastercard is “actively engaging” with central banks around the world on their plans to launch new digital currencies, the company said in a blog post on Wednesday.

“The announcements from both Mastercard and BNY Mellon confirm the fundamental shift that financial institutions are committing to cryptocurrencies,” said Ed Moya, senior market analyst at Oanda Corp. “This is great news for further mainstream acceptance with cryptocurrencies and will likely continue to keep the excitement going for bitcoin.”

Twitter Inc has also done some “upfront thinking” around how to handle bitcoin, including if employees and vendors ask to be paid in the cryptocurrency and whether the firm needs to have the digital asset on its balance sheet, chief financial officer Ned Segal said in an interview on CNBC.

Twitter co-founder Jack Dorsey has been a long-time advocate of bitcoin. Square Inc, which Dorsey also co-founded, has invested in the cryptocurrency.

“These are just the early innings of corporate adoption, as digital currencies are beginning to play a larger role in robust balance sheet management,” said Nathan Cox, chief investment officer at Two Prime, an investment firm specialized in digital asset and derivative strategy management.

Wall Street Bets, the popular Reddit forum at the center of the retail investor frenzy, is talking about cryptocurrencies as well. The unverified Twitter account “Wallstreetbets mod” posted a call to buy bitcoin and marijuana stocks.

Regulatory scrutiny remains a wild card for crypto investors. US Treasury Secretary Janet Yellen, speaking at a Treasury forum for financial sector innovation, warned misuse of cryptocurrencies was a growing problem. Yellen has previously raised concerns about the use of cryptocurrencies in illicit financing.

Why is dogecoin dropping? The crypto has tumbled 20% since its Monday record

A doge’s breakfast?

The popular dogecoin crypto asset, engineered as a joke back in 2013, has tanked over the past week after reaching a record value on Monday, leaving few investors laughing.

Dogecoin, at last check, was trading at 0.06784 cent, down over 20% from its Feb. 7 record high of 0.087159, according to data from CoinDesk. That decline meets the commonly used criteria among Wall Street chart watchers and technical analysts for a bear market.

Read: Dogecoin? A lot of ‘retail punters are going to lose money,’ says crypto expert

It isn’t clear where the crypto is headed from here, it is still up by about 50% over the past seven-day period and enjoys an eye-popping 1,350% gain since the start of 2021, boasting a market value of $8.7 billion, as of Friday afternoon. That ranks dogecoin just outside the top 10 cryptos, with bitcoin BTCUSD, +0.21% atop the leaderboard with a market value surpassing $880 billion.

“ ‘People are moving markets en masse and are playing greater fool with each other without understanding the ramifications or their own psychological limitations.’ ” — Charles Hayter, CEO of London-based research site CryptoCompare

Doge’s rally got started on the back of a series of bullish, albeit sometimes cryptic tweets from Tesla Inc. TSLA, +0.55% Chief Executive Elon Musk.

A number of celebrities including, Calvin Broadus, otherwise known as Snoop Dogg, and Gene Simmons of the rock band Kiss joined Musk—as well as billionaire investor Mark Cuban—have been tweeting about investing in dogecoin.

On Reddit’s popular SatoshiStreetBets chat forum, some expressed a hope to push dogecoins value to $1.

However, crypto experts have warned that dogecoin, pronounced “dōj-coin” and commonly associated with a popular meme featuring a shiba inu dog, has limited utility compared with other decentralized cryptographic assets, including bitcoin.

Dogecoin co-founder Billy Markus told The Wall Street Journal in an article at the beginning of February that he created the asset in 2012 as a “lighthearted cryptocurrency,” then known as Bells, to serve as the fun version of bitcoin.

In an open letter on Reddit this week, Markus also wrote about the cryptocurrency.

“It went from a silly joke to something worth something to people very quickly, and a community was developing fast, with lots of shady people and lots of new people, quickly putting up services and infrastructure around it,” the co-founder wrote.

Nic Carter, a crypto and blockchain venture capitalist who founded Castle Island Ventures, on CNBC earlier in the week cautioned that average investors could be badly hurt by making speculative bets on an asset with no real purpose. He also found it quizzical that Musk would support the virtual asset.

“It’s somewhat disconcerting to see Elon Musk so enthusiastic about it,” the Castle Island co-founder said.

Bullish bitcoin investors make the case that price gains in bitcoin, the world’s No. 1 cryptocurrency, are supported by the limited supply of the crypto that is inherent in its code. Only 21 million bitcoin will ever exist, and so-called mining for bitcoin, or solving complex computational problems that are rewarded by bitcoin, become harder as time goes on. The final cache of bitcoins likely aren’t going to be mined until around 2140.

The supply of dogecoin, on the other hand, has no built-in limit, with the number of dogecoin that can be mined at any given time varying from one to hundreds of thousands.

Nonetheless, interest in dogecoins underscores the appetite for alternative assets in an environment where 0% interest rates are prevalent as governments around the world attempt to mitigate the economic harm from the COVID-19 pandemic.

Charles Hayter, CEO of London-based research site CryptoCompare, told MarketWatch earlier this week that investors need to apple caution to such investments like dogecoin.

“People are moving markets en masse and are playing greater fool with each other without understanding the ramifications or their own psychological limitations.

Nigeria’s SEC Puts Plans to Regulate Crypto on Hold in Light of Central Bank Ban

Nigeria’s Securities and Exchange Commission (SEC) announced Thursday it has put plans to regulate cryptocurrencies on hold in light of the central bank’s decision to ban them, according to a report by the Guardian Nigeria.

The regulatory body released a statement officially confirming any plans to regulate the cryptocurrencies are now on hold following a Central Bank of Nigeria (CBN) directive ordering banks to close any accounts transacting with cryptocurrencies.

“For the purpose of admittance into the SEC regulatory incubation framework, the assessment of all persons and products affected by the CBN circular of Feb. 5, 2021, is hereby put on hold until such persons are able to operate bank accounts within the Nigerian banking system,” the SEC said in a statement seen by the publication.

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The CBN letter which was signed by Bello Hassan, Director of Banking Supervision, said it was reminding regulated banking institutions that “dealing in cryptocurrencies or facilitating payments for cryptocurrency exchanges is prohibited” and any breaches of the order would face “severe regulatory sanctions.”