You are reading Crypto Bit Bybit, a quick round-up of important opinions and trends in the crypto market that you don’t want to miss.
Fidelity Survey – 22% of US Respondents Invest in Digital Assets
A recent survey by Fidelity Digital Assets found the number of U.S. institutional investors dabbling in crypto derivative products surged significantly in 2020. Conducted among 774 institutions in the U.S. and Europe, the survey concludes that 22% of U.S respondents invested in digital assets have exposure via futures, a substantial increase from 9% in 2019. The growing interest and acceptance of crypto assets will, in turn, boost market confidence and herald the arrival of a more sophisticated and diverse class of investors. Wall Street’s adoption of Bitcoin and cryptocurrency is happening, as Ernest Hemingway would describe it, “gradually and then suddenly.”
Bloomberg Price Prediction – $20,000 in Year 2020
In that respect, Bitcoin has indeed received validation from the institution. Bloomberg analysts predict bitcoin prices could more than double this year to $20,000, or go to $250,000 by early 2023, or $300,000 within five years. The prediction is based on past price patterns, and if 2020 follows the pattern of 2016, also a halving year as you might recall, we can expect wild price movements in the second half of 2020.
Grayscale’s Emerging Competitor – Wilshire Phoenix
We have emphasized the role of Grayscale repeatedly in our previous discussions. The question then arises, “Will Grayscale’s position as the most important marginal buyer in the market go unchallenged?” At least, there is not for a lack of trying. According to a recent SEC filing, the New York-based asset manager Wilshire Phoenix is looking to compete with Grayscale Investment’s $3.6 billion Bitcoin trust by filing to launch a new Bitcoin Commodity Trust that offers “exposure to Bitcoin” without the encumbrance of “acquiring or holding BTC”. While GBTC has become an SEC reporting company, Phoenix’s previous attempt to establish a Bitcoin ETF was rejected by the SEC earlier this year.
Mark Cuban: Another Dot-com Bubble
Not everyone from the institution is equally hopeful. Billionaire investor Mark Cuban compares the current stock market climate to the Internet bubble of the late 1990s, during which he famously structured a collar trade to hedge his massive exposure to Yahoo. Cuban explored the uncanny similarities between the markets then and now, and voiced concerns that excessive speculations in the market amid the ongoing pandemic may lead the prices of stocks to soar before crashing. If shared optimism of the current market boom spreads to the crypto market, crypto investors are likely to be in for a rough ride.
The speculation from Cuban, a Bitcoin skeptic who once compared Bitcoin to baseball cards for its lack of “intrinsic value” is, however, not entirely unfounded. In March, the price of Bitcoin experienced a 40% crash and has since shown a weak but consistent correlation with gold and the S&P 500 index. While gold has continued to trend up, Bitcoin suffered a major setback on 11 June that parallels the adjustment of the stock market indices.
However, with its 30% gain year-to-date, Bitcoin is still way ahead of other major indicators.