Bitcoin bust appears to be over – for now
Is the bitcoin crisis over? The cryptocurrency has fallen 37% since reaching an all-time high in mid-April. Still, the mini bear market may have bottomed out. At the time of writing, bitcoin is trading just below $ 40,000, having gained more than 8% since the start of the month.
Sentiment towards bitcoin has improved following positive regulatory news, says Anthony Cuthbertson in The Independent. The Basel Committee, the global banking regulator, “officially recognized” digital currency as an asset class last week. This paves the way for banks to hold cryptoassets. This marks “another major step” for the recognition of cryptocurrencies in “the world of traditional finance”. A day earlier, the Central American nation of El Salvador became the first in the world to make bitcoin legal tender. Elon Musk was also a part of the latest bitcoin rebound, says Barbara Kollmeyer for Barron’s. Tesla’s CEO confirmed that the company has only sold 10% of its bitcoin holdings, despite refusing to accept bitcoin payments due to environmental concerns over its huge energy impact. Bitcoin is believed to consume more electricity than the entire nation of Kazakhstan and not far from “what is used by the Netherlands”.
Institutional adoption is accelerating, says Laurence Fletcher in the Financial Times. An Intertrust Group survey of hedge fund managers reveals that they expect to “hold an average of 7.2% of their assets in cryptocurrencies in five years”, which implies “$ 312 billion in crypto assets, “according to Intertrust’s calculations. Current holdings are unknown, but more institutional money is entering the market. The total market capitalization of all cryptocurrencies is now around $ 1.7 billion, which is equivalent to the size of Amazon.