Have Elon Musk and JPMorgan Started a Chain Reaction?

Ashna  |  Mar 3, 2021

Crypto market is currently in the midst of watching its very own version of personalized sunrise, crowded with global attention and gaining brand advocates in the form of institutional investors and high-net-worth holders. Where the figures of the world’s largest cryptocurrency value, Bitcoin, took a parabolic stance while entering the year 2021 with nothing less than fireworks, what lay as the underlying cause of the surge was global adoption and appreciation. 

PayPal Was Just the Beginning 

Bitcoin, while hitting an all-time high every other day till the end of February, rallied over $58,000 before going into the correction phase. While the community was in profound gratification with the news of PayPal accepting cryptocurrencies, that ultimately resulted in the hammer pound, finally breaking the previous all-time high of 2017. The difference, however, between the previous bull run of BTC and the current is almost palpable. Backed with no sign of FOMO, the current adoption witnessing industry leaders like Tesla and JPMorgan Chase, metaphorically carrying the crypto flag. 

Where the early crypto adopters and believers always knew that the day would come when almost every recognized financial institution would have to consider the undeniable potential in the leading crypto asset, it’s almost ironic to see the change of sentiment that once confined the reputation of cryptocurrencies, now seems to diminish in the shadows of illegal activities. While Tesla’s Elon Musk didn’t show hesitation in expressing his interests in the crypto world and has already showcased his influence on the market with a single tweet, JPMorgan on the other hand was particularly known as one of the bashers that previously critiqued Bitcoin. Now the leading institution itself has become quite the influencer for the asset. 

The two wildly leading organizations have somewhat sparked a chain reaction across the market, piquing the interest of other industry giants and institutions to see the encrypted light of the day. 

Effects of JPMorgan’s Sweet “Note”   

Merely a week ago, strategists at JPMorgan in a note advised their clients to consider allocating 1% of their portfolio in cryptocurrencies as a hedge against the fluctuations in the traditional assets. The sentiment was certainly backed by the promising trail of major investments in Bitcoin including Paul Tudor Jones, Stan Druckenmiller, Tesla, and MicroStrategy

While MicroStrategy has been buying the dip for quite some time now and taking an early stand with the increasing size of its Bitcoin treasure, now valued at over $4 billion, JPMorgan’s suggestion acted like a spark that fired the long line of suitors that are currently following behind, supported by the reliable words of the leading investment bank. 

Trail of Banking Giants 

Following in the similar footnote of JPMorgan’s words, Jurrien Timmer, the director of global macro at Fidelity Investments, has asked investors to consider adding bitcoin to their portfolio. Given that Fidelity currently oversees over $9.8 trillion in total customer assets, the note has heavily added support to the current and massive wave in the bitcoin coming from leading experts and institutions.

Belonging to the same niche, multinational investment bank and financial services company Goldman Sachs announced on the same day as Fidelity, their plans to start trading Bitcoin futures within its Global Markets division. Like JPMorgan itself, the bank previously never showed any interest in venturing into cryptocurrencies, but now has openly accepted to explore bitcoin-focused exchange-traded funds. 

The third participant sparking the popularity of the BTC support wave had nothing but great potential in their understanding of bitcoin and its role as a growing asset. Global investment bank Citi, in their report, raved about the potential status of Bitcoin in the future backed by the increasing number of businesses accepting bitcoin and the crypto asset’s chances of breaking into the mainstream. Suggesting that Bitcoin may become the choice of currency for international trade in the future, the Citi report discussed the advantages that the crypto asset brings with global reach and borderless transactions.

Taking a “deep dive” into crypto, Dan Loeb, CEO of Third Point, through a series of tweets has mentioned his interests in ways to bridge the gap between traditional finance and the crypto space. 

"Culturally I compare bridging the crypto world with the old as akin to finding a portal between two distinct worlds in the multiverse," said Dan Loeb.

Although being late to the “crypto party,” as the CEO of the New York-based asset management firm has put in his tweets, his very expressive comments about the crypto space may just become a very strong current in the already charging wave. Being quite a known figure on Wall Street, his take and interests in the crypto market easily indicate his already built-up understanding of the space, which only fuels the raging fire of BTC popularity. 

Social Media Giant Enters the Crypto Market

While Twitter stands as one of the most sought out social media platforms to catch up on the minds of crypto leaders and gather personal intel, it is only the first time that the platform itself has shown interest in actually indulging in the BTC market itself. Following the steps of MicroStrategy, Twitter, on March 1, announced a $1.25 billion convertible bond offering. According to the announcement, the convertible bonds offered by the platform are expected to be private, unsecured, and open for institutional buyers only.

While the details of revelations from banking giants and leading social media platforms are definitely something to talk about, but rather it’s their participation itself in the Bitcoin and crypto market that marks the advancing growth and trust in the world of cryptocurrencies. The current wave in the popularity of Bitcoin was already on a parabolic run, but it would be foolish to ignore the attention received in a matter of days after JPMorgan’s suggestion to the investors came out, and of course, Tesla announced its hefty investment of $1.5 billion in bitcoin. Being the leaders in their own industry, the market is now more influenced than ever by the asset’s worldwide acceptance and adoption. 

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