It’s been a while since my last article.
As mentioned in my previous post, bitcoin prices has been range-bound. There was a spike in pricing yesterday as we saw bitcoin prices rising to a high of USD7,000 mainly due to the transparency and trust issue with Tether. People moved their funds from Tether to stablecoins like Bitcoin and ethereum. This resulted in a short term price spike especially in Bitcoin prices to USD7700. But prices came down sharply in an hour time.
Notwithstanding, this brings a fundamental point. Bitcoin is the safe-haven for cryptocurrency. If you are expecting a rise in crypto, the very first cryptocurrency that investors will buy is bitcoin.
Development of custodian services
In fact, I think things are moving positively. There is a major news yesterday that Fidelity has launched its instiutional platform for bitcoin and ethereum . Quote from the article
Fidelity Digital Assets will offer three main services. The most elaborate of these appears to be custody services for bitcoin, ether and other digital assets. In particular, the service is being designed give institutional investors a compliant way to secure their assets by holding them in a physical vault.
There has been barriers for institutional funds to come in mainly due to regulatory concerns. The most major of all issues is custody services. The Securities and Exchange Commission requires private funds to use a third party, like a bank or another regulated financial institution for those holding more than $150 million in assets.
Hedge funds need it, family offices need it. They can’t participate in digital currency until they have a place to store it that’s regulated. In fact many banking institutions which include the likes of Goldman, JP Morgan, Nomura are jumping on the bandwagon.
I believe we may start seeing regulated custodian services very soon. In fact, Bitcoin storage company BitGo has received regulatory approval from South Dakota Division of Banking.
The window of opportunity to buy bitcoin at 6000 levels or below is getting shorter. Despite all the pessimism surrounding crypto markets, once custodian services for cryptocurrency are offered, bitcoin prices are going to skyrocket.