Bitcoin Aims to Retake $50,000 as Market Mood Improves
Bitcoin climbs above $49,000 in a market comeback. The movement is boosted by more financial institutions announcing BTC endorsement.
*Sage FX would like to state that traders should research extensively before following any information given hereby. Any assumptions made in this article are provided solely for entertainment purposes and not for traders to guide or alter their positions. Please read our Terms & Conditions and Risk Disclosure for more information.
- Bitcoin climbs above $49,000 in a market comeback
- More financial institutions announce Bitcoin endorsement
More Adoption for Bitcoin
Bitcoin is seeing increased buying interest in the first couple of days this week as market participants have shaken off recent concerns over Bitcoin’s price level in the short-term. The number one digital coin is slowly approaching the $50,000 level in its current move to the upside, following a dip that took the price below $43,000 on Sunday, Feb 28. Bitcoin is now gravitating towards $48,900, up about 8% this week.
Ethereum, the second-largest cryptocurrency, also marks an increase this week since it’s higher by 9% since Monday. The whole market cap in the crypto space now eyes the $1.5tn mark. Bitcoin’s market share remains near its lows for the year, currently at 60.9%.
This week’s recovery in the crypto market was underpinned by two major financial players, Citi and Goldman Sachs. Citi, the global investment bank, said on Monday that Bitcoin is “at the tipping point” and could become the preferred currency for international trade. “Bitcoin’s future is thus still uncertain, but developments in the near term are likely to prove decisive as the currency balances at the tipping point of mainstream acceptance or a speculative implosion,” Citi said.
“The entrance of institutional investors has sparked confidence in cryptocurrency but there are still persistent issues that could limit widespread adoption”, however, “Bitcoin is becoming the de facto ‘North Star’ of the digital asset space, with its trajectory being seen as a compass for the evolution of the broader ecosystem,” the report concluded.
Bitcoin Plans for Big Players
In the current heated crypto environment, Goldman Sachs officials announced yesterday the bank restarts its cryptocurrency trading desk and will begin dealing with Bitcoin futures. Reportedly, the bank is also considering launching a Bitcoin exchange-traded fund. Goldman Sachs first created a cryptocurrency desk in 2018, right before the market meltdown which saw Bitcoin’s price go down by 80%. Since then, the market structure has changed significantly and now includes many institutional investors and professional money managers who have jumped on the bandwagon. CME, International Exchange, and Fidelity are some of the established financial institutions that offer Bitcoin-related products.
JPMorgan Chase is also exploring the possibility of adding Bitcoin to its portfolio. In a note to clients, JPMorgan strategists endorse a 1% portfolio allocation to Bitcoin. The firm’s global head of research, Joyce Chang, wrote last week that “investors can likely add up to 1% of their allocation to cryptocurrencies to achieve any efficiency gain in the overall risk-adjusted returns of the portfolio”.
JPMorgan team advises against using Bitcoin as a hedge in times of traditional market drawdowns because, according to the bank’s strategists, crypto assets come with “questionable diversification benefits at prices so far above production costs, while correlations with cyclical assets are rising as crypto ownership is mainstreamed”.
JPMorgan has been dabbling in cryptocurrencies since 2017 when CEO Jamie Dimon called Bitcoin “a fraud”. The bank has come a long way since then. JPMorgan’s analysts have recently predicted that Bitcoin’s price could reach $146,000.