Why Miami, Tesla and Institutional Investors Are Driving Bitcoin to Mainstream Adoption

By Juan Rio Salvador, LinkedIn |Rioxa Consulting 

I believe that 2021 may be the inflection point for blockchain and cryptocurrencies mainstream adoption. Many “bull” crypto investors see bitcoin as digital gold, and a hedge against inflation as there is a finite amount. On the other hand, the “bear” crypto investors challenge the continuous increase of bitcoin prices and what they consider a bubble.

Bulls and bears symbolise both optimism and pessimism to describe market trends by the way they attack: a bull motions its head and horns up; a bear swipes its paws down. In crypto we also have “whales” to refer to individuals or entities that hold large amounts of cryptos, they could potentially manipulate their value.

The recent announcements of institutions buying bitcoin, and crypto payments services potentially coming to the market, will make a strong case for bitcoin as both a store of value and a payments token:

Tesla announced the investment of $1.5 billion from its balance sheet in bitcoin, the price jumped to. $48,000 after this. They will also start accepting it as payment.

PayPal said that it was planning to start allowing customers to use their crypto balances.

Uber’s CEO recently commented on how they are considering adding cryptos including bitcoin as a potential form of payment, if there is a clear benefit.

Twitter and Square CEO, Jack Dorsey is a big supporter. Square, a payments platform company, has accepted bitcoin as a form of payment for a while.

Bitcoin, Welcome to Miami / Bienvenida a Miami… Will NYC Be Next?

Apart from Elon Musk, retail and institutional investors there are now major cities looking at the benefits that bitcoin can bring to them.

Miami’s Mayor, Francis Suarez posted in Twitter a video following the support of the resolution he submitted to implement bitcoin. This was officially approved by the City of Miami governing commission. Miami is now proposing to pay municipal workers and collect taxes in bitcoin.

Miami’s workers could now choose to receive a portion of their pay in bitcoin. On top of this, people will be able to pay all or part of their property taxes or city fees in crypto. Suarez also wants to hold bitcoin in the city’s treasury. In his original resolution the mayor said, “… is committed to promoting the emergence of bitcoin as it continues to gain mainstream acceptance.”

Exciting times ahead for Miami citizens and visitors. On a similar note, Andrew Yang, who is running for Mayor of New York City, posted on twitter that if he is elected, “… as major of NYC – the world’s financial capital – I would invest in making the city a hub for BTC and other cryptocurrencies.”

More Financial Institutions Catching Up or Are They Actually Getting Ahead of The Curve?

In 2017, I thought that banks were going to start adopting on stages distributed ledger technology (DLT); blockchain being the main technology in this space and cryptocurrencies; bitcoin being the first and the leading one. However, the industry and most investors have been sceptical until recently.

It seems that the tide is turning and the sense is that either they embrace it or they are going to be left behind.

In 2021 we are seeing growing mainstream acceptance for bitcoin and other cryptos. Despite of regulatory requirements and high levels of fluctuation bitcoin is being added to institutional balance sheets. Banks are announcing custody solutions and payments giants like PayPal, Visa and Mastercard are looking to integrate digital assets.

Mastercard website explains why they are bringing crypto onto its network in 2021. They considered that crypto will create more possibilities for shoppers and merchants

BNY Mellon, the oldest bank in America, announced on its website that is forming a “New Digital Assets Unit to Build Industry’s First Multi-Asset Digital Platform” this year to process bitcoin and other cryptocurrencies for clients.

According to Bloomberg, a Morgan Stanley investing unit, is looking into whether crypto would be a “suitable option for its investors,”. Morgan Stanley already has approx. 11% stake in MicroStrategy, which is holding over $2 billion in bitcoin.

Insurance giant MassMutual invested $100 Million into bitcoin. On their press release they advised that, “…the firm’s bitcoin position is held on NYDIG’s secure, audited, and insured custody platform.”

Exchange-traded funds (ETFs) to Further Drive Investment Adoption?

Since I got exposed to blockchain and cryptocurrencies in 2017, I have been hearing about firms trying to get bitcoin ETFs approved by regulatory agencies. Why does this really matter?…

Exchange-traded funds (ETFs) are investment vehicles widely used by investors with small amounts of money and time to invest. They are simple to invest on as you do not own the actual assets so EFTs could allow more investors to enter the crypto market.

I believe that a crypto ETF would work similarly to any other ETF. The ETF would track one or more digital cryptos or tokens, instead of tracking an index/exchange or a combination of stocks/assets.  ETFs price units change as investors buy and sell.

Canada’s Ontario Securities Commission approved last week the launch of the world’s first bitcoin ETF. The expectation now is that other regulators will follow. Securities regulators’ in Australia said that they are open to a bitcoin ETF, if investors are protected by the proper rules.

There have been several submissions for digital currency EFTs to the U. S. Securities and Exchange Commission (SEC) but they have not been successful yet.

2021 Bitcoin Price Predictions? Analysts Forecast Values Between Zero to $550K…

Traditionally banks have considered bitcoin too speculative and challenging from a regulation point of view. However, they may feel the pressure from stakeholders to adopt it.

JPMorgan Chase analysts, in a research note to clients, predicted a long-term bitcoin price target of more than $146,000 based on the assumption that it will grow in popularity as an “alternative to gold”.

Analysts come up regularly with long-term price predictions for bitcoin. The price forecasts from top crypto industry experts goes mainly on a range between nearly zero to $550K…

This is not financial advice, and I am not a financial advisor, but the future looks bright for bitcoin and blockchain. Google trends data for 2021 shows that web searches for bitcoin are increasing again. However, they are below the 2017 all-time web searches highs.

Blockchain innovation continues to spread across different industries, this expansion will potentially drive more retail and institutional investors. Ethereum as the second most popular cryptocurrency will probably come next, but Ethereum transaction fees are still very high. So, the demand may move to other highly capitalised stable coins to hedge for this.

As with any investment, you need to know your risk appetite and tolerance to effectively manage your risks and have an exit strategy. The risks of trading cryptocurrencies include significant losses due to its volatility and high levels of speculation.

Author bio  LinkedIn |Rioxa Consulting

Juan Rio Salvador is a global business transformation leader and risk management expert. He has over twenty years of real-world management experience in financial services and innovation in Europe and the USA.

He founded Rioxa Consulting to empower people to thrive in life and in business by inspiring them. Juan is passionate about leadership & business strategy, the future of work, continuous improvements, blockchain, and artificial intelligence (A.I.).

He is an energetic international speaker invited at forums and conferences in Frankfurt, Budapest, London, Madrid, Barcelona, etc. He recently published “How to Build a Thriving Busines, The Proven Formula for Growing Your Business Post Covid-19”.

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