One after another! Wall Street can’t sit still. What do big guys like about bitcoin?

Since the fourth quarter of last year, the rise of bitcoin, the world’s largest cryptocurrency, has been very eye-catching. On the 17th, bitcoin continued to rise, breaking through $51000 a piece, setting a new record. Real time data on the 18th showed that bitcoin continued to rise, with $52500 per coin, up nearly 7% in the day. Some data show that bitcoin has increased by more than 70% this year. It took only five months for bitcoin to rise by $40000 a piece from $10000 in October last year to $51000 today. Analysts pointed out that the direct driver of this round of bitcoin’s rise is that financial institutions and multinational giants have successively entered the crypto digital assets market. With the rising price of bitcoin, more and more major investment banks on Wall Street are interested in bitcoin. JPMorgan recently said it was seriously considering this asset class, and Goldman Sachs also showed interest in cryptocurrencies. A division of Morgan Stanley is also understood to be considering adding bitcoin to its list of possible bets. Specifically, on February 8, Tesla announced that it had purchased $1.5 billion worth of bitcoin in January, and it is expected to start accepting bitcoin as a payment method in the near future. Its payment will be subject to legal restrictions and will be used in a limited range. Subsequently, MasterCard announced on February 10 that later this year, the company will begin to allow customers to pay part of the cryptocurrency directly in its payment network. New York Mellon bank, an old American bank, announced on February 11 that it would provide its customers with storage and transfer services for digital currencies such as bitcoin. In addition, Royal Bank of Canada capital markets said Apple may enter the cryptocurrency industry by buying $1bn of bitcoin, which may attract more users to use its bitcoin transactions based on Apple wallet and push up the price of bitcoin. BlackRock, the world’s largest asset manager, is likely to be a major investment bank that has moved faster. Rick Reid, chief investment officer of the bank’s global fixed income business, said on Wednesday that BlackRock had begun to enter bitcoin. Why is bitcoin popular? Bitcoin’s price often fluctuates, which used to be synonymous with high risk. But institutions are enthusiastic. What do they like about bitcoin? ‘despite the extraordinary volatility of bitcoin today, people are looking for valuable assets, and under the assumption that inflation is high and debt is accumulating, people are looking for assets that could appreciate, so we have begun to try to get into this area, ‘Mr. Reid said. Supporters of bitcoin believe that bitcoin provides a safe haven, a bit like gold, against the backdrop of a weak dollar and increased risks of inflation. In the high inflation and low growth economic environment, in order to avoid the loss of nominal principal and the need to pursue higher returns, investors’ demand for cash hoarding has jointly pushed up bitcoin. Some industry experts say that on the one hand, bitcoin is not as speculative as it used to be, and the investment community is becoming more and more mature. Prior to Tesla, companies such as microstratey and square had already announced their holdings of bitcoin. On the other hand, in the past decade, bitcoin has been the only investment option with a low correlation with other traditional assets. This means that it is a good diversified investment choice for institutional investors. Retail investors need to be aware of the risk of withdrawal. It is worth noting that in addition to institutional investors, retail investors’ enthusiasm for investing in the special currency is also rising. However, bitcoin is a kind of high-risk asset, not a safe asset. Meanwhile, as a special asset class, bitcoin will not generate any predictable cash flow, and the only way for investors to obtain returns is to increase the price of bitcoin, so it is easier to form speculative bubbles. And most of bitcoin is controlled by a few accounts. In a sense, bitcoin has a very clear property. Therefore, the market price volatility of bitcoin itself will be very large, so when the retail holders operate in the market, they must pay attention to the risks and avoid the losses caused by the sharp rise and fall.

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