06 Dec
Bitcoin so close to $20K
Will it be the new gold?
After last week’s collapse, Bitcoin is back in the market spotlight as it tries to beat its new records. Yesterday the cryptocurrency, thanks to a leap of more than 8%, exceeded its all-time high of 2017, just over $19,700. A leap that brought the capitalization around 360 billion dollars, the same values of the US financial giant JpMorgan.
All this when, according to Bloomberg, institutional investors demobilized billions of dollars from gold.
Is it a mere coincidence or the beginning of a rotation that will have a profound impact on cryptocurrency and the precious metals market impossible to know for sure?
It is difficult to say with certainty. But it was enough to ignite a debate about whether the world’s largest digital currency could one day compete with bars as an inflation hedge and portfolio diversifier.
Compared to gold, however, the fall of Bitcoin last week, the biggest since March, after a 150% increase since the beginning of the year, has once again underlined the extreme volatility of this asset.
“Gold was indeed the secure asset of the past world and the baby boom generation,” said Jean-Marc Bonnefous, a former commodity hedge fund manager turned crypto-currency investor. “Now it is being replaced by digital assets like Bitcoin.”
Bitcoin towards new records
The King of cryptocurrency had already tried to beat his own records last week, but without success. After testing the $19,870, the Bitcoin had started to slide to $16,000. Then the new trend kicked in, which brought the price to the $20,000 threshold.
Threshold that many analysts see as far from upside potential.
According to Tom Fitzpatrick of Citibank, who set a target of $318,000 at the end of 2021, the Bitcoin’s performance is reminiscent of the gold of the 1970s, when it was released from the dollar and went from $35 an ounce to around $600.
Like the precious metal, Bitcoin is an asset with a limited offer, but with the advantage that it can move freely. Not only that. For the analyst of Citibank the current macro context, characterized by policies of quantitative loosening of the central banks, is in favour of a further rise in the price of cryptocurrency.
Visa to Offer Bitcoin Rewards
The news is of those that cannot be tracked. On the contrary, it will be talked about and a lot in the next few weeks, since in some way the opening of the giant of means of payment, with respect to digital currency, represents a certification of how the introduction of Bitcoin in the “normal world” is getting closer and closer.
As reported by Cointelegraph, Visa and BlockFi are working together to launch a new credit card that rewards users with Bitcoin, laying the foundations for a wider mainstream adoption of digital currency.
BlockFi, a New York-based startup specialising in crypto-currency secured loans and savings accounts, announced its partnership with Visa on Tuesday.
The new credit card will reward purchases with Bitcoin rather than air miles or other redemption premiums. Cardholders will be entitled to receive 1.5% of their BTC purchases.
The card, with an annual fee of $200, will be issued by Evolve Bank & Trust.
Although the card will be available to the public in early 2021, BlockFi account holders will be able to register in advance. BlockFi is “excited to add credit cards to our suite of products and expand Bitcoin’s accessibility to a wider range of consumers,” said Zac Prince, founder and CEO of the startup.
The partnership with BlockFi is part of Visa’s Fintech Fast Track program, which “aims to accelerate the integration process” with the credit card network. Terry Angelos, senior vice president and global head of fintech at Visa, said the goal of the accelerated program is to help innovative companies “scale efficiently”.
This is not Visa’s first foray into the world of cryptocurrency. Earlier this year, the credit card company partnered with digital startup Fold to offer a debit card that earns prizes based on encryption.
More generally, Visa has outlined a positive vision for the adoption of digital currency, reversing a previous and more hostile attitude. The credit card company is also helping to define regulations for digital resources around the world, including working with the World Economic Forum to develop recommendations on the use of central bank digital currencies.
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