The Bitcoin rally shows no signs of slowing down despite skepticism
Bitcoin (CCC: BTC-USD) is on a wild run of epic proportions with no sign of stopping. In early February, the market value of the digital currency was over $ 1 trillion, according to Coindesk. Even now, some investors remain skeptical about putting their capital in the asset. However, the writing is on the wall. Source: Shutterstock Institutional interest in Bitcoin is at an all-time high. The Bank of New York Mellon (NYSE: BK), the oldest bank in the country, is paving the way for Bitcoin to leverage the networks normally reserved for conventional financial assets. Not so long ago, large custodians stayed out of the place due to regulatory or legal risks. However, customer demand is forcing them to reevaluate their positions. Meanwhile, Tesla CEO Elon Musk (NASDAQ: TSLA) has bought $ 1.5 billion worth of Bitcoin. Daniel Ives, an analyst at Wedbush Securities, estimates that Tesla has made around $ 1 billion in paper profit on the investment to date. InvestorPlace – Stock market news, stock advice and trading tips Online payment processing companies PayPal (NASDAQ: PYPL) and Square (NYSE: SQ) have already allowed their users to buy, sell and hold Bitcoin. PayPal in particular is a real coup for Bitcoin. At the end of 2020, it had a total of 377 million active accounts. The overarching theme is that the rally in bitcoin prices is forcing the world’s largest publicly traded financial services companies and major Wall Street giants to rethink their approach. Therefore, one shouldn’t be skeptical about investing in the space at the moment. Bitcoin is finally going mainstream, and while there will be slips along the way, the trajectory is up. Why This Bitcoin Rally Is Different From 2017 If you’ve read the news, you probably know the Bitcoin rally. The cryptocurrency had an overwhelming 2020, rising from around $ 1,000 to $ 20,000. Because of the epic bull run, many investors compared the situation to the last digital currency parabolism in 2017. 8 Risky Stocks To Buy When Risk Is Your Middle Name However, there are some key differences in the current run with the one we had in it Year 2017. At first it may seem surprising, but the 2020-2021 run is less extreme than the last. In this case, we’ve seen a 20x return while last year was roughly an 8x return. It is important to note that in 2017 several projects were launched as Initial Coin Offerings (ICOs), which led to massive rampups for Ethereum (CCC: ETH-USD), Ripple (CCC: XRP-USD) and their companies. In fact, the other cryptos outperformed the Bitcoin rally and a few more. Cut to the current run, and it’s just the opposite. Bitcoin leads the indictment, with multiple cryptos soaring in the shadows rather than the other way around. CryptoCompare data shows that trading volume for the digital currency on the eight major exchanges tracked by CoinDesk 20 exceeded $ 11 billion, beating the 2017 record. Eventually, Bitcoin will become mainstream. Everyone wants to take advantage of the massive rally, and that’s why you’re seeing massive financial institutions stepping on the scene. I’ve gone through several large companies that have turned to digital currencies, but I’d like to single out the recent Mastercard (NYSE: MA) announcement before moving on to the next section. It has announced that it will support “selected cryptocurrencies” on its network in the second half of the year. Another case in which the American company warms up to Bitcoin. Alarm bells Despite the amazing bull run, there are still some skeptics. I would divide them into two categories. One sentence does not believe in the inherent history of Bitcoin and equates it with the tulip craze of 1637. The other group believes that at this point the valuation is stretched and the bursting of bubbles renders their investment worthless. We have already addressed the concerns of the latter in this article. The first sentence, however, deserves further discussion. These essentially come from the Warren Buffet School of Investing. The Omaha Oracle avoided investing in Bitcoin and outlined its reasons. First, the billionaire only invests capital in areas he understands. In addition, he pursues a firm “buy and hold” strategy based on years of investment experience. He has held onto companies like Coca-Cola (NYSE: KO) and American Express (NYSE: AXP) because he believes in their stories. These companies generate stable recurring cash flow due to their excellent business models. Bitcoin doesn’t have that, however. So buffet stays away. When you’re reading this and that strategy that sounds a lot like your investment, it’s hard to convince you. However, if you’ve held this digital asset for a while, the ebbs and flows are not new. What interests you about Bitcoin is the prospect of making 10x on your investment. And at the moment there are no signs that stormy days are ahead for the cryptocurrency, which is finally getting a place at the table in the investing world. At the time of this writing, Faizan Farooque held (neither directly nor indirectly) positions in the securities identified in this article. Faizan Farooque is a contributing writer for InvestorPlace.com and numerous other financial websites. Faizan has several years of experience analyzing the stock market and was a former data journalist at S&P Global Market Intelligence. He is passionate about helping the average investor make more informed decisions about their portfolio. Faizan does not directly own the above securities. More From InvestorPlace Why Everyone Is Investing In 5G All FALSE Top Stock Pickers Reveal Their Next Potential Winner It doesn’t matter whether you’re making $ 500 million or $ 5 million in savings. Do this now. # 1 Game to Profit from Biden’s Presidency The post-bitcoin rally is showing no signs of slowing down, although skepticism first appeared on InvestorPlace.