The euphoria that has swept through the markets is certainly playing a role, as investors seeking yield in a low-interest world are considering alternative investments. But a series of recent announcements have also shown that cryptocurrencies are entering a new phase of maturity, with market participants treating them with growing respect.
“I think the types of institutions that are now starting to come in say a lot about acceptance,” Greg King, CEO of Osprey Funds, told me. Last week, his company launched the Osprey Bitcoin Trust, which aims to increase exposure for everyday investors.
“People are looking for stores of value,” said Rick Rieder, BlackRock’s chief investment officer for global fixed income, in a recent interview with CNBC. “We started to dive into it a bit.”
Bitcoin is by far the best option for professional investors who are looking for cryptocurrencies. But ether, the second largest cryptocurrency in terms of market value, is also growing in popularity.
The Chicago Mercantile Exchange, one of the major derivatives markets, launched ether futures contracts in early February. Prices have exploded since.
King pointed out that more work is needed as cryptocurrencies age.
“All of these institutional grade tools that make up the financial market ecosystem … which is still in its very early stages for the crypto space,” he said.
On the radar: Most traditional market players are still examining bitcoin, assessing the liquidity of crypto markets, and how they would react to various shocks.
Deep skepticism remains. In a research report released last week, JPMorgan strategists called bitcoin an “economic side show”, noting that cryptocurrencies “remain several times more volatile than core asset markets” and are still nearly exclusively used for speculation and not for spending.
But it is difficult to dispute the direction of the trip given the events of the past month.
“The rise of digital finance and fintech demand is the real story of the financial transformation of the Covid-19 era, not the bitcoin price rally,” JPMorgan said. “But recent announcements of greater acceptance and adoption by Tesla, BNY Mellon and Mastercard confirm the increased demand and interest from investors to make payments in cryptocurrencies.”
Biden’s stimulus bill moves forward
The latest: the House budget committee is taking steps to finalize the legislation so that it can move to a general vote. House Speaker Nancy Pelosi has said she would like to see that happen this week.
Sticking point: Democrats plan to pass the legislation through a process called reconciliation, which will allow Senate approval with just 51 votes. The Senate is divided 50 to 50 depending on the party. Vice President Kamala Harris has the ability to step in and act as a tiebreaker.
This means Democrats cannot afford to lose the support of even a single member of their party. And some moderate lawmakers have made it clear that the $ 15 minimum wage hike does not have their support.
Watch the schedule: Pelosi has said she expects the Covid relief package to be on Biden’s desk by March 14, when the current jobless benefits expire. The clock is turning.
Friday: India’s GDP; Data on personal income and expenditure in the United States Income from DraftKings