Signs of a widening embrace across the financial services industry sent Bitcoin to new heights, with the cryptocurrency closing in on $50,000 for the first time.
A week after Tesla announced its $1.5 billion investment in Bitcoin, the digital asset has kept making inroads into traditional finance, with the latest being news that an investment unit of Morgan Stanley is considering whether to bet on Bitcoin.
And there’s evidence that more companies are beginning to add services for cryptocurrencies — an asset class that is still lightly regulated and controversial among policymakers. On Thursday, BNY Mellon said it’s formed a new team that’s developing a custody and administration platform for traditional and digital assets. Mastercard Inc. has also said it will begin allowing cardholders to transact in certain cryptocurrencies on its network.
The combination of luminaries like billionaire Elon Musk and powerhouse banks is adding fresh ammunition to Bitcoin’s meteoric gains. In February alone, prices are up some 40% and were last hovering near $48,000.
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“The key for Bitcoin’s path higher is to win over more corporate endorsements,” Edward Moya, senior market analyst at Oanda Corp. “Bitcoin is no stranger to massive weekend moves and the next several days could easily see some wild swings.”
There remains a fierce debate over whether Bitcoin is a legitimate asset with any real purpose or value. The token has been derided for its role in money laundering and scams, and recently Nassim Nicholas Taleb, author of “The Black Swan,” said he’s getting rid of his Bitcoin. A currency is never supposed to be more volatile than what you buy and sell with it, Taleb said on Twitter, adding that you can’t price goods in the cryptocurrency. “In that respect, it’s a failure (at least for now).”
Even so, the price trend is still straight up, and Bitcoin stands as another example of the speculative excess that are defining this bull market — along with penny stocks and cannabis companies.
There are hints that more Wall Street heavyweights could dip into the crypto market. In an interview with CNBC, JPMorgan Chase & Co. Co-President Daniel Pinto said that client demand isn’t there yet on Bitcoin, but he’s certain that’ll change.
Bloomberg reported on Sunday that Counterpoint Global, a unit of Morgan Stanley Investment Management is exploring whether the cryptocurrency would be a suitable option for its investors, according to people with knowledge of the…