Bitcoin, Institutional Adoption, NFTs, MicroStrategy.
The bitcoin price has added more than 10% in recent days, climbing back above $50,000 and toward its all-time high of $58,000 per bitcoin as the U.S. approved a huge $1.9 trillion coronavirus stimulus package.
Bitcoin’s screeching rally has been put down to a combination of Wall Street institutional adoption, corporate interest, and retail traders piling into the bitcoin and cryptocurrency market.
Bitcoin’s price has soared in recent months, hitting a record above $58,000 last month as big investors pile in and the asset class matures.
A bitcoin “fear gauge,” similar to the Cboe Volatility Index (VIX) investors use to gauge volatility in the stock market, saw its first trades on Wednesday.
The T3i BitVol Index measures the expected 30-day implied volatility in bitcoin derived from tradable bitcoin option prices.
I think the relationship between bitcoin prices and the tech market is very close,” Mobius, the founding partner of Mobius Capital Partners, told Bloomberg this week, adding investors should: “Watch that indicator.”
With the bitcoin price up a blistering near-600% over the last 12 months, investing legend Mark Mobius has warned a sharp bitcoin decline could hit tech stocks “very badly.”
According to the website nonfungible.com, the NFT industry had a market capitalization of $338 million at the end of 2020.
The relative sizes of the markets means it’s effectively impossible for NFT spillover to have a material price impact” on bitcoin, Piers Kicks, venture partner at the cryptocurrency analysis firm Delphi Digital, said in a Twitter message to CoinDesk.
The white-hot market for non-fungible tokens has become so big, NFTs are even showing up in the headlines of mainstream publications like the New York Times and on cable news programs.
So it would stand to reason there might be some spillover into the bitcoin universe from NFTs, which work atop mainly Ethereum-based blockchain networks, even if the connection might be indirect.
Still, few have gone as far as MicroStrategy Inc. Eight months after its first investment, the software firm has a Bitcoin holding worth more than $5 billion.
Shares of MicroStrategy have rocketed almost 600% since mid-July, boosting the fortune of founder Michael Saylor, a billionaire until an accounting scandal in 2000.
The chief executive officer is now worth $3 billion, according to the Bloomberg Billionaires Index, joining the ranks of the world’s richest crypto holders, a list that isn’t definitive since some fortunes can’t be identified or verified.
In 2000, a shareholder filed a class-action lawsuit against MicroStrategy, alleging it misled investors over the company’s earnings by booking revenue prematurely to inflate profits.