Since cryptocurrency markets began seeing a resurgence, months ago, there have been various instances of ‘big money’ getting in on the action. Examples of this can be seen on various levels, including high profile investors, intelligence firms, hedge funds, and service providers. Today we’ll take a look at each, and why an entrance is being made now.
Our first example is also the most recent occurrence. Only days ago, software giant and intelligence firm, MicroStrategy, announced to the world that they purchased a significant sum of Bitcoin. More specifically, MicroStrategy purchased 21,454 BTC, which equates to roughly $250M USD.
Michael Saylor, CEO at MicroStrategy, states,
“Our investment in Bitcoin is part of our new capital allocation strategy, which seeks to maximize long-term value for our shareholders…This investment reflects our belief that Bitcoin, as the world’s most widely-adopted cryptocurrency, is a dependable store of value and an attractive investment asset with more long-term appreciation potential than holding cash. Since its inception over a decade ago, Bitcoin has emerged as a significant addition to the global financial system, with characteristics that are useful to both individuals and institutions. MicroStrategy has recognized Bitcoin as a legitimate investment asset that can be superior to cash and accordingly has made Bitcoin the principal holding in its treasury reserve strategy.”
To reiterate, the world’s largest intelligence firm notes that Bitcoin…
- is a dependable store of value
- has long-term appreciation potential
- appeals to, both, individuals and institutions
- is a legitimate asset
- can be superior to cash
As the aforementioned figures would indicate, MicroStrategy fully believes this, as it has put its money where its mouth is – to the tune of $250 million
Paul Tudor Jones
When a hedge fund manager, worth nearly $6 billion USD, makes a move, people notice. So when Paul Tudor Jones announced, in May, that he would be allocating ‘low single-digits’ percentage of the Tudor BVI fund into Bitcoin, crypto enthusiasts understandably got excited. While ‘low single-digits’ may not sound like much, only a few percentage points allocated from a $5 billion fund represents a hearty sum.
“The best profit-maximizing strategy is to own the fastest horse…If I am forced to forecast, my bet is it will be Bitcoin.” – Paul Tudor Jones, CEO of Tudor Investment Corp.
Inflation. With the seemingly never ending printing of FIAT, many are looking towards safe-haven assets, as a hedge against expected inflation. Bitcoin is not the only asset to benefit from this sentiment – gold and other precious metals are also booming as well.
More than just a popular online-personality, Dave Portnoy is the founder and president of Barstool Sports. In recent months, Portnoy has captivated the attention of many, as he livestreams his day-trading activity. As a successful entrepreneur, worth roughly $100 million, with a strong online presence, his pending entrance into Bitcoin has excited many.
Portnoy most recently caught the attention of many with a public invitation to the Winklevoss twins. This invitation surrounded a desired introduction to Bitcoin, and how he can partake. This did not go unnoticed, as the Winklevoss twins saw this invitation, and accepted.
With over 1.3M followers, Portnoy indicates in past videos that he was feeling the pressure to re-evaluate Bitcoin, and the potential behind it. Although the Bitcoin community can at time be overzealous in its preaching, this trait appears to have done the trick in this particular instance. This pressure from his followers simply underscores the current appetites of many investors, as they look for high potential assets to mitigate risks of inflation.
While PayPal has yet to release official statements surrounding its intentions, it has become increasingly clear that the company is gearing up to launch cryptocurrency services in the near future. Speculation of this first came when the company began hiring cryptocurrency specialists for product development.
In addition to herding talent, multiple sources have shared information with news outlets, indicating an established partnership between Paxos Crypto Brokerage and PayPal – not unlike the recently announced partnership between Paxos Crypto Brokerage and Revolut US. Each of these partnerships would allow for the seamless integration of an API-based service, which allows for the buying and selling of a plethora of cryptocurrencies.
In its early days, Bitcoin straddled the line between fizzling out and becoming a respected asset. Fast forward to 2020 and if Bitcoin has made one thing clear, it is that it has staying power. We have reached a point in time where there has been enough development and adoption surrounding the sector, that the chances of Bitcoin fizzling out are all but nil.
With this being the case, who better to capitalize on Bitcoin, than an established FinTech service provider? Revolut has adopted it. Square has adopted it. WealthSimple has adopted it. RobinHood has adopted it. If anything, PayPal might be a little late to the party.
An Increasing Pace
Each of these instances on their own may not upend markets. Cumulatively however, they point to a positive shift in sentiment towards cryptocurrencies. While the ‘why now’ may vary between each new entrant, Bitcoin markets are no longer populated solely by speculative retail traders, but home to participants from a variety of sectors. It is viewed as a legitimate asset, and whether looking at service providers, hedge funds, intelligence firms, etc. – adoption is occurring at an increasing pace.