Four days that blasted bitcoin past $60,000
By Gregory Boyd
18:03, 15 October 2021
Bitcoin burst through the $60,000 mark on Friday in an explosion of optimism driven by old-fashioned bankers and regulators.
Take-off began with a news report just after 10 pm New York time (UTC-4) Thursday, following a week of news about the growth of institutional involvement in digital assets and rising pressure on authorities like the US Securities and Exchange Commission to bring bitcoin and its brethren into the tent.
Here is how the week in bitcoin news played out:
Monday, 11 Oct
Bitcoin fans go ballistic as JPMorgan Chase CEO Jamie Dimon makes some typically sharp remarks about cryptocurrencies at a forum for bankers.
“I personally think that bitcoin is worthless, I don’t want to be exposed to it,” he said.
His bitcoin shot had a chaser, though. Dimon notes that America’s biggest investment bank is already active in cryptocurrency trading, despite regulatory barriers to direct involvement.
“Our clients are adults, they disagree – that’s what makes markets. So if they want to have access to buy or sell bitcoin, you know it’s hard, we can’t custody it, but we can give them legitimate, as-clean-as-possible access.”
What is your sentiment on BTC/USD?
Tuesday, 12 Oct
The International Monetary Fund warns in its annual financial stability report that cryptocurrencies could destabilise the global financial system if banking and securities regulations fails to bring them into the system.
Wednesday, 13 Oct
A report by leading investment advisory and indexing firm MSCI warns that equity investors, including institutions like pension funds, face “creeping cryptocurrency exposure” in two ways:
- Newly listed companies from the digital assets space are being added to indexes that guide passive investing strategies, and
- Companies that investors already hold (directly or through an index product) are beginning to “announce strategies that include Bitcoin or other cryptocurrencies.”
Meanwhile, deputy Bank of England governor Jon Cunliffe tells an audience of international bankers “there are signs of growing institutional investor interest,” in futures and other derivatives pegged to digital assets.
He drew attention to an extraordinary run-up in volume: “To take one example, CME crypto futures trading volume has increased tenfold over this year to around $2bn a day.”
Thursday, 14 October
The SEC presents a fuse and Bloomberg lights the match.
At 2:02 pm EDT the SEC’s Investor Education social media account posts a Tweet reading: “Before investing in a fund that holds Bitcoin futures contracts, make sure you carefully weigh the potential risks and benefits.” Thousands of replies and quote-Tweets note that, since the SEC is sitting on applications for investment funds to launch cryptocurrency futures products, something must be up.”
Eight hours later, Bloomberg moves a report that the SEC will approve for trading as early as next week at least two exchange traded funds (ETFs) that plan to invest in digital asset futures.
According to Bloomberg, the SEC will allow the ProShares and Invesco ETFs to start trading next week because they are based on futures and were filed under mutual fund rules that SEC chair Gary Gensler has previously said, “provides significant investor protections.”
Within 30 minutes, the price of Bitcoin zoomed from $57,111.47 to $59,381.54
Friday, 15 October
Buyers dominate as the price touches $60,000, retreats, rises, retreats and finally powers through $60,000 at about noon New York time.
Prominent digital assets booster and venture investor Anthony Pompliano says on Friday that Bitcoin futures ETFs will likely push up value of bitcoin “in an insane way.” Yet from the standpoint of investor returns, he notes, a bitcoin ‘spot’ ETF would be better “both from a price tracking and fee structure standpoint.”
Pompliano’s commentary underlines the paradox: bitcoin has been boosted by bankers.
Read more: US leads the world in cryptocurrency mining as China falters
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