The era of the bitcoin and cryptocurrency in general has arrived. It took about 11 years and now we can firmly say that the mainstream financial world has entered into the cryptocurrency world. And bitcoin specifically is now a mainstream household investment asset. Welcome to the new norm of bitcoin.
Take a look a this chart from leading institutional investor Grayscale. Not only do they buy up loads of bitcoin but they also appear to be buying up bags of some of the other top cryptocurrencies too. In total their crypto holdings are around $13 billion and counting. And there are other mainstream institutions buying up as much crypto as they can too. Old-fashioned investors don’t want to or don’t know how to buy and hodl their own cryptocurrency, so they play it safe and ask their brokers at these legacy companies to buy and invest for them.
As we know now, this institutional buying of crypto is what is driving this bull cycle, compared to the last one, which was mostly retail investors. In 2017 and prior, most big investment firms simply weren’t open enough to bitcoin and were till sceptical presumably. Now they are all diving over each other to buy up as much as they can.
Obviously the arrival of the last halving in May 2020 inspired many to dive into the bull market cycle this time around. Based on past halvings, three in total, there is enough evidence now to confirm an inevitable cyclic trend, and this has encouraged legacy institutions to invest in a big way.
Not only that but even governments are buying bitcoin now. According to https://norwegian-btc.fund/
“Through its ownership stakes in MicroStrategy (2.14%) and Square (0.83%), the Norwegian Government Pension Fund now indirectly holds 912.72 bitcoin(~17.4m USD). This is equivalent to 16981 sats per Norwegian citizen.”
Now we know that governments can’t always be trusted, and the people themselves don’t own any of this bitcoin in Norway’s pension fund directly. So the government could always sell it. But at this rate, when a government invests their pension fund into bitcoin, then you know that crypto is as mainstream as any other asset class on the planet.
One of the other massive institutional investors is mentioned above, namely MicroStrategy, headed by CEO Michael Saylor. They happen to be listed on the Nasdaq as a mainstream stock for investors.
On August 11 they announced that “MicroStrategy (Nasdaq: MSTR) the largest independent publicly-traded business intelligence company, today announced that it has purchased 21,454 bitcoins at an aggregate purchase price of $250 million.”
They went on to say in https://ir.microstrategy.com/news-releases/news-release-details/microstrategy-adopts-bitcoin-primary-treasury-reserve-asset:
“This investment reflects our belief that Bitcoin, as the world’s most widely-adopted cryptocurrency, is a dependable store of value and an attractive investment asset with more long-term appreciation potential than holding cash.”
This Nasdaq traded company says that bitcoin is a better store of value than cash. That about sums it up and shows how far bitcoin has come in it’s first decade alone. Imagine where it could be in another decade from now. Cash may be dead by then and multiple digital currencies will abound. And perhaps bitcoin will be there with the best of them, used as a global currency.
MicroStrategy stock price on the Nasdaq 10 years
The massive money printing that went on this past year by the Fed during the pandemic scare and lockdown (which crashed much of the market) has made serious investors wary of fiat. Add to that the massive debt to GDP and it becomes obvious that cash is dead. How times have changed from just a few years ago when we would always say “cash is king”. Now bitcoin is king.
Saylor, the CEO of MicroStrategy put it succinctly when he said:
“We find the global acceptance, brand recognition, ecosystem vitality, network dominance, architectural resilience, technical utility, and community ethos of Bitcoin to be persuasive evidence of its superiority as an asset class for those seeking a long-term store of value. Bitcoin is digital gold – harder, stronger, faster, and smarter than any money that has preceded it. We expect its value to increase with advances in technology, expanding adoption, and the network effect that has fueled the rise of so many category killers in the modern era.”
This is the most bullish sentiment one could ask for in the bitcoin world so far. Anyone who is remotely financially educated or interested in improving their long term investment portfolio, will be buying bitcoin or other top cryptocurrencies. Those who are afraid of the unknown should should simply follow the whales.
(image from Grayscale.co)
