U.S. stocks have started the week in strong fashion, as bond yields eased from last week’s highs early on Monday.
Two positive developments over the weekend have also buoyed investors: The U.S. House passed the Biden administration’s $1.9 trillion pandemic-relief package on Saturday before the Food and Drug Administration granted emergency authorization to Johnson & Johnson’s
COVID-19 vaccine — the first single-shot dose available to Americans.
The price of bitcoin
rose more than 5% to $47,691 on Monday, as it regained ground following the cryptocurrency’s worst week of the year last week, having climbed to a record high of $58,332 the previous weekend.
In our call of the day, Citi analysts said bitcoin was at a “tipping point” between mainstream acceptance or a “speculative implosion.” But recent developments, including electric-car maker Tesla’s
$1.5 billion investment and moves by PayPal
to accept payments, pointed toward the former.
The analysts, led by Citi GPS managing editor Kathleen Boyle, noted there was a “host of risks and obstacles” standing in the way of the cryptocurrency’s progress.
“But weighing these potential hurdles against the opportunities leads to the conclusion that bitcoin is at a tipping point and we could be at the start of massive transformation of cryptocurrency into the mainstream,” they said.
The report added that bitcoin could eventually become “the currency of choice for international trade,” due to its global reach, neutrality and lack of foreign exchange exposure.
The biggest change in recent years has been the shift from a retail-focused endeavor to “something that looks attractive for institutional investors,” the authors noted.
If recent efforts lead to a central bank-backed digital currency, individuals and businesses would have digital wallets holding a variety of cryptocurrencies just like today, with checking, savings and treasury accounts, they said. “In this scenario bitcoin may be optimally positioned to become the preferred currency for global trade,” they added.
However, obstacles ahead along that path include upgrades to the marketplace and the potential for the cryptocurrency space to move closer to the oversight and rules of traditional financial regulators, Citi noted.
U.S. stocks made significant early gains, with the Dow Jones Industrial Average
2.1%, or 657 points, higher shortly after the open. The S&P 500
and the Nasdaq Composite
were also up. European stocks climbed and Asian markets moved higher overnight on hopes for Biden’s U.S. stimulus package and…