The Bitcoin price nears $50,000 and will continue to reach new highs in this first quarter of 2021 – but investors should also expect volatility due to increasing regulatory scrutiny.
This is the warning from Nigel Green, CEO and founder of deVere Group, one of the world’s largest independent financial advisory and fintech organisations.
It comes after the cryptocurrency hit more than $49,700 for the first time in history on Sunday.
Mr Green says: “Last week was a massive one for Bitcoin, reaching new all-time highs amid soaring interest from institutional investors.
“Morgan Stanley, the U.S. investment giant is reported to be considering investing in Bitcoin through its $150 billion investment arm; Elon Musk’s Tesla announced it had invested $1.5 billion in the digital currency and was getting ready to accept it as payment; BNY Mellon confirmed that it had created a digital assets unit to build a custody and admin platform for crypto assets; and Mastercard said it would give its merchants the option to accept cryptocurrencies later this year.
“In addition, Miami confirms it is considering paying workers and collecting taxes in cryptocurrency and the mayor of the city wants to hold Bitcoin in the city’s treasury.
“This all follows the likes of PayPal’s decision last year to allow customers to buy, sell and hold Bitcoin and as Wall Street giants like Goldman Sachs and JP Morgan issue RFIs (request for information) to explore Bitcoin and crypto asset custody.”
He continues: “There is a clear direction of travel: institutional investors are taking Bitcoin more and more seriously as a financial asset and a medium of exchange. They are increasing their exposure to it at a faster rate than ever before.
“This is pushing cryptocurrencies ever more into the mainstream financial system and, subsequently, driving the price skywards.”
The deVere chief goes on to say: “With the growing institutional demand combined with ultra-low interest rates, we can expect Bitcoin – which has already given a 55% return so far year to date after the 300% gain in 2020 – to reach new highs in this first quarter of 2021.
“However, with increasing dominance and value, comes increasing regulatory scrutiny.
“Bitcoin and other cryptocurrencies will come under the spotlight from watchdogs like never before and this can be expected to create volatility in the market.”
His warning comes as central banks and governments around the world ramp up their focus on digital currencies.
In the U.S. in recent days, Treasury Secretary Janet Yellen raised again the prospect of future cryptocurrency regulation and as the Securities and Exchange Commission (SEC) could reportedly investigate Elon Musk over Tesla’s $1.5 billion Bitcoin purchase.
Nigel Green concludes: “Institutional investors are increasingly appreciating that in this tech-driven, ultra low interest rate, low growth world, and where there is diminishing trust in traditional currencies, digital and borderless cryptocurrencies may be becoming a better fit.
“We can expect the price of Bitcoin to surge to fresh highs as a result. But investors must be aware that regulatory pressures will cause price turbulence.”
Fintech CEO: George Residence Bitcoin Acceptance Has Policy Implications, More than Simple Brand Awareness
Last month, luxury hospitality icon, George Residence, announced that it would be the first hotel in Nigeria to accept Bitcoin. Most reviews of this announcement came using the lens of brand awareness, both for the property, as well as cryptocurrency. But, Richard Gardner, today, offered a different take on what’s unfolding in Nigeria.
“When we see news like this, it’s easy to trumpet the mainstream appeal of Bitcoin, and, over the past six months, there certainly has been a huge increase in familiarity with the alternative to fiat currency. Between business icons like Mark Cuban and Elon Musk openly supporting the growth of cryptocurrencies, it is easy to read news like this as just one in a line of businesses moving to accept a form of payment that’s becoming more and more popular. But, there’s something else at play here,” noted Richard Gardner, CEO of Modulus, a US-based developer of ultra-high-performance trading and surveillance technology that powers global equities, derivatives, and digital asset exchanges.
In his announcement, George Residence CEO Yanju George said that, not only was he accepting Bitcoin, but that he planned to make Bitcoin the company’s primary reserve asset, noting that “[w]e have allocated around 50% of our cash reserves to Bitcoin… We hope to increase that as time goes on. Bitcoin is the currency of the future and it is only right that we are strongly positioned so we do not get left behind.”
“I think if you look at the policy behind the move, you’ve got to see this as a hedge against inflation. The Naira has had significant struggles. We’ve seen a surge in Bitcoin in 2021, but, at the end of the day, the surge means different things in different places. In the United States, folks may be looking at Bitcoin as an investment opportunity, but in places like Nigeria, Bitcoin and cryptocurrencies offer more than that. They are really a way to make sure that the assets you have today aren’t devalued over the next six months. Unchecked inflation is not just an economic problem; it’s a problem that deeply affects the citizenry when the fiat currency they rely on to purchase food and energy and life essentials is worth a fraction of what it was last year. In places with rampant inflation, Bitcoin is being considered by the populace as a potential solution to a number of institutional problems,” explained Gardner.
Modulus is known throughout the financial technology segment as a leader in the development of ultra-high frequency trading systems and blockchain technologies. Over the past twenty years, the company has built technology for the world’s most notable exchanges, with a client list which includes NASDAQ, Goldman Sachs, Merrill Lynch, JP Morgan Chase, Bank of America, Barclays, Siemens, Shell, Yahoo!, Microsoft, Cornell University, and the University of Chicago.
“As Nigeria looks towards the future, there is a lot of work to be done, to be sure. But, there is much to be optimistic about, as well. The fact that the citizenry is so engaged in cryptocurrencies means that, if the country can put the pieces together and get a handle on infrastructure-based issues, not the least of which is inflation, then it can begin to look at how it can invite innovation and enhance technology’s role as a tool in its economic engine. The interest is already there,” noted Gardner.
Bitcoin Miners Reap a Record $57 Million in Profits Daily
Data acquired by cryptocurrency trading simulator Crypto Parrot indicates that bitcoin miners’ revenue stood at an average of $57 million daily over the last 30 days between March 27 and April 26.
The highest amount was recorded on April 15 at $81,172 in the wake of the asset attaining a record price level. The least daily revenue was on April 17 at $45,028. On March 27, the revenue was $58,772, while on April 26, the figure stood at $47,398.
Elsewhere, compared to the 2017 bull run, the last 30 days cumulative bitcoin miners revenue of $1.7 billion was higher by 40.21%. During the December 2017 rally, the miners’ revenue that month totaled $1.23 billion.
Bitcoin mining revenue usually depends on the asset’s price, which has surged by about 90% in 2021. Notably, on April 14, the asset attained an all-time high of almost $65,000, and miners earned the highest revenue the following day.
Bitcoin mining environmental concern
With bitcoin mining returning high revenues, the report highlights some of the concerns around the activity. According to the research report:
“On the flipside, amid surging revenues for miners, bitcoin continues to be the center of attention from environmentalists questioning the asset’s sustainability. Mining is known to consume more electricity, destabilizing the environment. However, mining equipment manufacturers focus on machines that consume less energy, while bitcoin backers believe in the future, there will be a more proactive shift towards renewable sources of energy.”
However, as mining revenue surges, more miners are motivated to bring more machines online to reap from the growth.
Over $9.2 Billion Worth of Bitcoin Positions Liquidated in 24 Hours as Coin Plunges to $52,000
Over $9.2 billion worth of cryptocurrency positions have been liquidated in the last 24 hours, according to the latest data from bybt.com.
$9.2 billion of long positions were said to have been liquidated following plunged in Bitcoin value from $63,000 to $52,000 in the early hours of Sunday.
Several other short positions were said to be affected. The plunge in the world’s most dominant cryptocurrency dragged on the entire crypto market.
With Ethereum, the second most capitalised coin declining by 20 percent, Cardano by 25 percent, XRP and Doge shed 16 percent and 25 percent, respectively.
As at 9:19 am Nigerian time, Bitcoin is trading at $55,977.35 to a coin. Meaning it has gained almost $4000 in the last four hours.
Crypto investors and traders are expected to jump on the dip and use it to further boost their portfolio.
As of the time of writing, bitcoin’s price has bounced back to around $55,000.
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