Is the bitcoin bust over? The cryptocurrency has tumbled 37% since hitting an all-time high in mid-April. Yet the mini-bear-market may have bottomed out. At the time of writing bitcoin was trading just below $40,000, having gained more than 8% since the start of the month.
Sentiment towards bitcoin has improved on positive regulatory news, says Anthony Cuthbertson in The Independent. The Basel Committee, the global banking regulator, last week “formally recognised” the digital currency as an asset class. That paves the way for banks to hold crypto-assets. This marks “another major milestone” for the recognition of cryptocurrencies in “the world of traditional finance”. A day earlier the central American nation of El Salvador became the first in the world to make bitcoin legal tender. Elon Musk also had a hand in the latest bitcoin bounce, says Barbara Kollmeyer for Barron’s. The Tesla CEO confirmed that the company has only sold 10% of its bitcoin holdings, despite refusing to accept payments in bitcoin because of environmental concerns about its enormous energy impact. Bitcoin is thought to consume more electricity than the entire nation of Kazakhstan and not far short of “what is used by the Netherlands”.
Institutional adoption is gathering pace, says Laurence Fletcher in the Financial Times. A survey of hedge-fund managers by Intertrust Group finds that they expect “to hold an average of 7.2% of their assets in cryptocurrencies in five years’ time”, implying “$312bn of assets in cryptos”, according to Intertrust’s calculations. Current holdings are unknown but more institutional money is entering the market. The total market capitalisation of all cryptocurrencies is now about $1.7trn, equivalent to the size of Amazon.
Subscribe to MoneyWeek
Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE
Sign up to Money Morning
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
-
Pensions: 140,000 pensioners to be hit by surprise tax demandTens of thousands of pensioners will be written to over the summer because their pensions have gone above the frozen income tax thresholds
-
Could Kamala Harris be America's next president?Kamala Harris is yet to become the Democratic nominee – but when she does, can she beat Trump?
-
Netflix steams ahead of its competitorsNetflix has beaten its rivals, so how can it keep growing?
-
UK mid-caps: an improving outlookUK mid-caps have perked up and the rally may run further, but long-term investors should remain selective
-
The tobacco industry is going smoke-free - how to profit from itTobacco companies have realised their traditional products are on the wane. But new opportunities have opened up – and should prove lucrative
-
Is it time to invest in creative industries?Any industrial strategy should not overlook the creative industries, one of our top national assets
-
Is Mercia Asset Management set for success?Mercia Asset Management helps the government fund smaller companies in Britain’s regions. Should you invest?
-
British stocks set for a boostBritish stocks are due for a bounce as the UK looks more stable compared to many economies
-
Ocado shares jump by a fifthOcado takes a turn for the better after attractive profit forecasts were announced
-
The AI boom is on borrowed timeThe hype around the AI boom could be on its way out – but why?
