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Bitcoin has come a long way since a person or group of people from Satoshi Nakamoto wrote an article in 2008 on how to use computing power around the world to create a digital currency that cannot be reused.
Ideas that like cryptocurrencies or hate them are becoming mainstream.
The cryptocurrency has soared so much, its total value has reached nearly 2.5 trillion U.S. dollars, comparable to the world’s most valuable company Apple, and has accumulated more than 200 million users. At this scale, financial institutions simply cannot ignore.
Companies that cater to the richest families in the world are increasingly investing some of their wealth in cryptocurrencies. Hedge funds are trading bitcoin, and big-name banks are beginning to provide services around bitcoin. PayPal allows users to buy cryptocurrency on its app, while Twitter helps people express appreciation for tweets by offering bitcoin to its creators.
In the latest milestone in the industry, Bitcoin-related easy-to-tradable funds began trading on Tuesday. Investors can buy exchange-traded funds from ProShares through an old-fashioned brokerage account-no need to understand what a hot or cold wallet is.
This is part of the large corporate movement, and they see an opportunity to profit from the enthusiasm of the cryptocurrency world as a new ecosystem is further built around it, whether they believe it or not.
“You can safely say that the arrival of the Bitcoin ETF era provides Wall Street with an opportunity to make money on Bitcoin in an unprecedented way,” said Ben Johnson, Morningstar Global ETF Research Director. “The winners in all of this are exchanges, asset managers and custodians. Whether investors win is a huge and bold question mark.”
Bitcoin has come a long way since a person or group of people from Satoshi Nakamoto wrote an article in 2008 on how to use computing power around the world to create a digital currency that cannot be reused. This year alone, the price has more than doubled to approximately US$62,000. Five years ago, its price was only $635.
Proponents of cryptocurrencies say they provide an important benefit for any investor: prices change independently of the economy, rather than with the economy like many other investments. More noble fans say that digital assets are only the future of finance, allowing transactions to avoid middlemen, and fees are tied to currencies that do not belong to any government.
At the same time, critics question whether cryptocurrency is just a fad. They said it used too much energy and pointed out all the strict regulatory scrutiny surrounding it. For example, last month, China declared bitcoin transactions illegal. Gary Gensler, chairman of the US Securities and Exchange Commission, said in August that the crypto world does not have enough investor protection and “it is more like the Wild West.”
This is not enough to stop the huge momentum of encryption, because it has gone from online curiosity to a larger part of the culture and corporate landscape.
In a survey conducted by Citi Private Bank, the bank manages funds for wealthy people around the world, and about 23% said they have made some investments in crypto. Another 25% said they are studying it.
The increasing acceptance of cryptocurrency on Wall Street has spawned a new batch of darlings to help people buy it. For example, the market value of the crypto trading platform Coinbase is approximately $64 billion, which is comparable to established companies such as Colgate-Palmolive, FedEx, and Ford Motor.
However, in the end, what many people on Wall Street see may not be Bitcoin and other cryptocurrencies, but the technology behind them.
Called blockchain, it allows the creation of a public ledger that everyone can check and trust-many people hope it will bring a lot of innovation. It is similar to today’s Netflix, Facebook, and other services that emerged from the infrastructure built during the boom and bust of the Internet bubble.
For example, JPMorgan Chase is already using blockchain technology to improve the transfer of funds between global banks. This is the same as JPMorgan Chase, run by CEO Jamie Dimon, who stated in an interview with Axios this month that Bitcoin “has no intrinsic value”.
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