Bitcoin: Billionaires Jay-Z, Elon Musk support digital currency

Bitcoin staged an unprecedented rally and flirted with the $50K mark this week as Tesla and Twitter announced their support for the virtual asset. Industry experts had predicted that bitcoin will hit the $50K mark by the end of 2021, however that seems to be proving critics wrong as the global momentum contributed by blue chips tell a different story.

On Friday, BTC was quoting over $47K as market was still digesting the Twitter CEO’s support for launching a new initiative called Btrust. Jack Dorsey, chief executive officer and co-founder, Twitter, announced that he was giving BTC 500 along with American rapperShawn Corey Carter — famously known as Jay-Z — to help launch Btrust. It will be aimed at funding bitcoin development, with initial focus in Africa and India.

“Btrust will be set up as a blind irrevocable trust, taking zero direction from us,” added Dorsey, who has openly declared his mission to make bitcoin the internet’s currency and has found many takers.

Mumbai-headquartered, DigitX believes that cryptocurrencies are a fantastic diversification to one’s portfolio and bitcoin among them is a must-have component of wealth for future generations.

“Bitcoin is a global internet payment system which runs on a peer-to-peer network without the intervention of a trusted third party. It’s a system which is trustworthy and has shown resilience by standing unhacked for over a decade. It’s a fair system with no owner, no management who stands to profit from it. It’s a self-governed honest and transparent system at play. Till only recently institutions have realised the wonderful concept it is and has begun adopting it. But prior to this, it has been entirely a retail driven phenomenon. With institutions like Tesla and Twitter diversifying into bitcoin from traditional investments and given the supply cap is limited, we are in for some tremendous momentum play in bitcoin. Please fasten your seat belts,” said Ashish Mehta, co-founder at Digitx.

“We think it’s a very welcome step, a positive step and the geo choices made by Twitter and JayZ, one of themost populous area i.e, India and Africa, after diversifying into bitcoin makes it a very prudent decision. With increased adoption, the value of the crypto assetwould only increase, thereby enhancing the value of the portfolio of these early institutional investors. Let us now wait and see how they plan to proliferate adoption. As industry partners, we would encourage such moves and are willing to collaborate to their efforts to enhance bitcoin adoption and thus development of more deeper roots.”

Bitcoin hovered close to record highs on Friday, set for gains of over 20 per cent in a milestone week marked by the endorsement of major firms such as Elon Musk’s Tesla, while the dollar pared losses that were incurred after weak US jobs data.

The world’s most popular cryptocurrency traded about 0.5 per cent down at $47,728, just south of a record high of $49,000 reached after US banking group BNY Mellon said it had formed a unit to help clients hold, transfer, and issue digital assets, Reuters reported.

Renowned investors including Paul Tudor Jones and Stanley Druckenmiller have been endorsing cryptocurrencies while large public listed companies such as Microstrategy and Square have been purchasing Bitcoin as part of their corporate treasury. This has led to a boost in crypto market confidence.

Tesla revealed on Monday it had bought $1.5 billion worth of the cryptocurrency — which soared by almost 10 per cent on a single day – and BlackRock, the world’s largest asset manager, added bitcoin as an eligible investment to two funds. Credit card giant Mastercard’s plans to offer support for some cryptocurrencies also boosted bitcoin’s ambitions towards mainstream finance, but many banks are reluctant to engage with it.

CoinGecko, a leading independent cryptocurrency aggregator since 2014, and a source of information for millions of cryptocurrency investors, believes bitcoin is gaining global momentum after Tesla’s $1.5 billion bitcoin purchase.

Bobby Ong, co-founder and COO, CoinGecko, said: “The race is on to see which other public companies will soon hold bitcoin on their corporate treasury. It will not be surprising if Twitter is the next company that announces that they will have bitcoin on their balance sheet. Jack Dorsey is a big proponent of bitcoin. His leadership of Square has seen Square purchase $50 million worth of bitcoin. It is great news that Jack and Jay-Z has set up a trust to support bitcoin development and growth in Africa, a region that holds a lot of potential for cryptocurrencies.”

2020 has been a great run for the cryptocurrency markets as market capitalisation of the top 30 coins grew 308 per cent (+$552 billion), outperforming 2019’s growth of 62 per cent (+$68 billion).

“Crypto assets will gain more momentum as global firms, celebrities show open support, this has seen supporting price rally. Tesla chief executive officer Elon Musk’s decision to buy $1.5 billion of the cryptocurrency, and accepting bitcoin from buyers will continue to have a ripple effect in months to come as more investors will be compelled to look at this virtual asset. Also, Twitter expanding its reach by getting actively involved in bitcoin space gives a push for global acceptance of this asset class. This is the right time to introduce investor protection to lead them to long-term sustainable growth strategy and not fall prey to short-term specualtion,” said Arshad Khan, CEO, Arabian Bourse.

DeFi — short for ‘decentralised finance’ an umbrella term for a variety of financial applications in cryptocurrency — ended 2020 with an all-time high market cap of $20.4 billion. The top 30 cryptocurrency market capitalisation ended the year with an all-time high of $732 billion.

Khurram Shroff, chairman, IBC Group, said: “With Tesla, entering the crypto currency ecosystem, it speaks volumes about the extent at which digital currency is gaining institutional adoption. There is an underlying momentum in the world with regards to it’s widescale adoption, with companies like Twitter getting on board and the world’s largest asset managers, BNY Mellon, planning to move money into crypto assets."

Shroff further added: "With Twitter setting up BTrust with a focus on India and Africa, we have massively expanded the scale of digital currency adoption. Both India and Africa are considered as the powerhouses of economic growth. Over the last 8 years, since IBC Group, has setup its operations in Africa, we have gathered significant understanding of their cultural and regulatory nuances. And from what I have seen I personally think, by using Africa and India as a hub for bitcoin development we are paving the way for its global adoption in the near future."

— sandhya@khaleejtimes.com