Bitcoin hits highest in two weeks on big money flow

HONG KONG: Bitcoin flirted with the US$54,000 (RM221,400) level and hit a two-week high yesterday, aided by more signs of institutional interest in the largest cryptocurrency.

The digital token rose as much as 4.3% and was trading at about US$53,900 as of noon in Hong Kong yesterday.

Rival ether also jumped, extending a two-day rally in the Bloomberg Galaxy Crypto Index to some 13%.

“Bitcoin and ethereum bullishness are back as more big-money bets keep flowing into cryptocurrencies, ” Edward Moya, senior market analyst at Oanda, wrote in an email. “Institutional interest still seems strong.”

The narrative that longer-term investors such as family offices, insurers and corporate treasurers are adding exposure to tokens is controversial but gaining traction.

Goldman Sachs Group Inc recently said it’s seeing substantial demand from institutions as it works to restart its cryptocurrency trading desk.

That marks out the current bull run in bitcoin as different to the 2017 bubble that burst, according to Goldman Sachs.

For skeptics, the crypto rally represents a prime example of speculative froth triggered by huge stimulus that could quickly unwind once financial conditions tighten.

Bitcoin is in a “strong position” to reach US$75,000, Evercore ISI strategist Rich Ross wrote in a note.

The cryptocurrency has been through some wild gyrations and currently sits about US$4,500 off a record of US$58,350 achieved on Feb 21.

It’s up almost 600% in the past year, a rally that dwarfs more traditional assets.

Ether, the second-largest token, has been rallying on the prospect of reduced supply amid an ongoing upgrade of the affiliated ethereum blockchain.

On Monday, NYDIG, a provider of bitcoin custodial services to institutions, said life, annuity and property/casualty insurers have more than US$1bil of direct and indirect bitcoin exposure on its platform.

NYDIG also announced a US$200mil growth capital round led by strategic partners including Stone Ridge Holdings Group, Morgan Stanley, New York Life, MassMutual and Soros Fund Management, among others.

In recent days, oil billionaire Kjell Inge Rokke came out in favour of bitcoin. Rokke’s Aker ASA is setting up a new business to tap into its potential.

Over the weekend, Chinese beauty app Meitu Inc said it invested in ether and bitcoin. Last month, Tesla Inc said it invested US$1.5bil in bitcoin.

Copyright © 2021 Bloomberg

Published by the Star newspaper.

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