Bitcoin races to new record as more firms embrace crypto - TechCentral

Bitcoin races to new record as more firms embrace crypto

Bitcoin jumped to a record high after Mastercard and Bank of New York Mellon moved to make it easier for customers to use cryptocurrencies.

The largest digital asset rose as much as 7.4% to US$48 364, surpassing the all-time high reached on Monday after Tesla announced it would hold $1.5-billion of the cryptocurrency on its balance sheet.

“The crypto-asset world is bursting into the realms of traditional finance at a staggering pace,” said Simon Peters, an analyst at investment platform eToro.

Mastercard singled out so-called “stablecoins”, which often peg their value to that of another asset, such as the US 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 said on 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.

Supporter

Even before announcing Tesla’s bet on bitcoin, Musk said he was a supporter of bitcoin on a social audio app and made multiple tongue-in-cheek references on Twitter to dogecoin — a Shiba Inu-themed 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.

“Mastercard’s plans to integrate crypto payments represents another indicator of the deep structural shifts taking place in our financial infrastructure,” said John Wu, president of Ava Labs. “Incumbent payment platforms are embracing digital currency solutions that are more equipped for the borderless, Internet-enabled economy.”

Twitter 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.

“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, chief investment officer at Two Prime, an investment firm specialised in digital asset and derivative strategy management.

While Tesla’s investment of $1.5-billion put the focus on whether more companies 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% of about $2.79-trillion of cash and cash equivalents held on the balance sheets of S&P 500 members.

Regulatory scrutiny remains a wild card for crypto investors. US treasury secretary Janet Yellen, speaking at a treasury forum for financial sector innovation, warned misuse of cryptocurrencies was a growing problem. Yellen has previously raised concerns about the use of cryptocurrencies in illicit financing.  — Reported by Olivia Raimonde and Eric Lam, (c) 2021 Bloomberg LP

© 2009 – 2021 NewsCentral Media