Bitcoin hits record as Mastercard, BNY Mellon embrace crypto
Reaches Us$48,663
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 per cent to US$48,663, surpassing the all-time high reached Monday after Tesla Inc. announced it would hold US$1.5 billion of the cryptocurrency on its balance sheet. The wider Bloomberg Galaxy Crypto Index also touched a record.
“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 U.S. 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 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.
Even before announcing Tesla’s bet on Bitcoin, Musk said he was a supporter of Bitcoin and made tongue-incheek references on Twitter to Dogecoin — a Shiba Inuthemed crypto started as a joke — sending prices soaring.
Mastercard is also “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, 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, CFO Ned Segal said in an interview on CNBC. Twitter co-founder Jack Dorsey has been a longtime 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 at Two Prime, an investment firm specialized in digital asset and derivative strategy management.
While Tesla’s investment put the focus on whether more firms will buy Bitcoin, the purchase is a drop in the ocean compared to the holdings of America’s blue-chip corporates.
The purchase is worth just 0.05 per cent of about US$2.79 trillion of cash and cash-equivalents held on the balance sheets of S&P 500 members, according to data compiled by Bloomberg.