Bitcoin reached a new all-time high price and breached $20,000 today on the shoulders of financial giants.
The long-awaited Dec. 16 milestone follows a string of high-profile investors and financial firms jumping very publically into bitcoin.
This includes Wall Street legends Stanley Druckenmiller and Paul Tudor Jones, Mexican billionaire Ricardo Salinas Pliego, and CNBC “Mad Money” host Jim Cramer. All have revealed bitcoin investments this year.
When an analyst predicted bitcoin will hit the unlikely height of $318,000 by the end of 2021, it wasn’t a deep crypto hodler, it was a Citibank managing director, Tom Fitzpatrick.
Today’s bull run may have gained the necessary momentum from them, but it’s not only the big investors who are pushing bitcoin to new heights. Another major source of buying pressure on bitcoin’s price is its integration by payment processing giant PayPal, making it more comfortable for newbies to invest in BTC. As Modern Consensus reported yesterday, the firm’s customers now purportedly buy Bitcoin faster than miners can produce it.
And competitor Square has jumped in on both sides, allowing customers to use their accounts to trade cryptocurrencies and putting $50 million of its own assets into bitcoin.
Institutional FOMO
Still, it’s the big names that bring credibility. Among the most talked-about of the big institutional investors is asset manager MicroStrategy, which last week announced that it had raised $650 million to buy more bitcoin, adding to earlier investments totalling $425 million in September.
At the time CEO Michael Saylor called bitcoin “a dependable store of value and an attractive investment asset with more long-term appreciation potential than holding cash.”
The new investments will take MicroStrategy’s BTC holdings to more than $1 billion. Substantially more, as that $425 million is currently worth nearly $790 million.
TokenMetrics chief technical analyst William Noble told Modern Consensus that institutional investors are now eager to buy Bitcoin. He said:
“There is one important lesson to learn from Bitcoin rising above 20k: don’t get in Michael Saylor’s way. He’s buying 10’s of millions at a time and he’s not price sensitive. In fact, all institutional buyers are not price sensitive anymore. They have to buy it before the year ends. If not, they will be seen as out of touch.”
But there are plenty of others. Bloomberg revealed earlier today that a hedge fund specializing in volatility bets, One River Asset Management, launched a crypto assets-specialized subsidiary called One River Digital Asset Management. The firm’s CEO, Eric Peters, said he expects the company’s crypto investments to reach about $1 billion of bitcoin and ether (ETH) by early 2021. He shared a distinctly bullish outlook:
“There is going to be a generational allocation to this new asset class. […] The flows have only just begun.”
In addition, U.K.-based investment manager Ruffer revealed its own $744 million Bitcoin investment. First reported by industry news outlet Coindesk, the investment is about 2.7% of the firm’s total assets under management.
Financial professionals are also seeing institutional adoption of bitcoin as a sign the cryptocurrency has reached a critical mass.
As Modern Consensus reported earlier this week, JPMorgan Managing Director Nikolaos Panigirtzoglou—who works for noted bitcoin skeptic Jamie Dimon—called the recent acquisition of $100 million worth of BTC by U.S.-based insurance giant Massachusetts Mutual Life Insurance an important event in the asset’s story:
“MassMutual’s Bitcoin purchases represent another milestone in the Bitcoin adoption by institutional investors… One can see the potential demand that could arise over the coming years as other insurance companies and pension funds follow MassMutual’s example.”
