Bitcoin rose to a nearly three-year high on the last day of this week’s trade, as investors continued to scoop the virtual currency on expectations it could well exceed its all-time peak of just under $20,000.
Bitcoin surged to $18,766.79, the highest since December 2017, and was last up 4.9% at $18,696. It has gained 17% so far this week, the largest weekly gain since June 2019, climbing more than 160% so far this year.
Today bitcoin has gotten to a place where institutional investors, banks, and family offices are legitimately pondering involvement as a defence against currency devaluation,” said Alex Mashinsky, chief executive officer at Celsius Network, a crypto lending platform.
He added that in 2017, the rally in bitcoin was led by retail investors who were early adopters.
Because large players, like LINE Corp and PayPal are involved this go around, we can expect more stability than the 2017 bubble. This isn’t a gold rush anymore,” he added.
The bitcoin market now boasts a functioning derivatives market and custody services by established financial institutions. Large firms including Fidelity Investments and Japan’s Nomura Holdings Inc have started safeguarding bitcoins and other cryptocurrencies for institutional investors.
Other major cryptocurrencies, including ethereum and XRP, which often move in tandem with bitcoin, rose 7.2% to $505.2, and 3% to 31 U.S. cents, respectively.
A senior executive at BlockRock, the world’s largest asset manager, admits that Bitcoin has become a permanent fixture in the global financial system, offering yet another tangible sign that the narrative surrounding digital currency has changed.
The International Monetary Fund published a new working paper on central bank digital currencies, or CBDCs, and their legal ramifications.
In the paper, researchers including IMF legal counsel Wouter Bossu and Catalina Margulis argue that current frameworks are inadequate for issuing public-facing CBDCs.
The researchers are particularly concerned about how existing definitions of money can apply to such a new technology, but, optimistically, suggest the problem is simple enough to fix.
President of the Dallas Federal Reserve Robert Kaplan believes the US central bank should begin work on a digital currency immediately, a clear indicator that some policymakers view this as an urgent matter.