This week in Bitcoin price: Feb 23-Mar 1
Published on March 1, 2021
The big picture
The volatility we saw late last week (a week that also included a new all-time high of $58,000) continued — with prices sinking below $44,000 on February 28 before rebounding to nearly $50,000 on March 1st. But volatility hasn’t put a stop to positive Bitcoin headlines: publicly traded tech companies Square and MicroStrategy both added more BTC to their corporate treasuries while Wall Street giants including Citibank, JP Morgan, and Fidelity issued reports about Bitcoin’s “digital gold” advantages — potentially adding further legitimacy for the kind of investors who have tended to favor traditional financial portfolios.
Important to note: Bitcoin wasn’t the only asset to lose value recently. Categories ranging from tech stocks to the S&P 500 have also seen dips.
On February 23rd, Square announced a second major purchase of Bitcoin for its corporate treasury, adding $170 million worth to its position. “Square believes that cryptocurrency is an instrument of economic empowerment, providing a way for individuals to participate in a global monetary system and secure their own financial future.”
MicroStrategy, the business analytics firm that helped spark corporate-treasury adoption of crypto, added another $15 million in Bitcoin to its vast holdings. The publicly traded firm now holds 90,859 BTC — worth $4.38 billion.
Fidelity (the first major Wall Street financial institution to take Bitcoin seriously) released a new major report called “Understanding Bitcoin.” Among the key takeaways: An increasing number of investors see Bitcoin as a legitimate asset. And its “digital gold” attributes — as a stable store of value that might offer protection against inflation — are increasingly attractive to investors. (The report also offers an intriguing portfolio-allocation strategy, in which Bitcoin takes the place of bonds in the common 60/40 stock and bond portfolio.)
Citibank also dug into crypto in a new report. In “Bitcoin at the tipping point,” Citi analysts point to Bitcoin’s increasing attractiveness to institutional investors: “Bitcoin's global reach and neutrality could spur it to become the currency of choice for international trade.” While the report considers potential downsides such as price volatility and regulatory uncertainty, it also notes the wide range of institutions that are participating in the “burgeoning market” of family offices, endowments and foundations, hedge funds, and asset managers.
Adding to Bitcoin’s potential viability as part of a traditional financial portfolio (alongside stocks and bonds), J.P. Morgan suggested that clients might benefit from adding crypto to their portfolios. Wrote the bank’s analysts: “In a multi-asset portfolio, investors can likely add up to 1% of their allocation to cryptocurrencies in order to achieve any efficiency gain in the overall risk-adjusted returns of the portfolio.”
Goldman Sachs, one of the world’s largest investment banks, announced that in March it will begin trading Bitcoin futures for clients.
Japanese online-retail giant Rakuten now allows users to easily spend Bitcoin on goods and services.
Spotlight: Crypto vs. the S&P 500 and gold
Over the last year — from March 2020 through the end of February — Bitcoin and Ethereum significantly outperformed assets like gold and the S&P 500.
How has Bitcoin fared on social media in the same period? While mentions haven’t rebounded to the peaks they saw in late 2017 and early 2018, they’ve been higher than any other period. The biggest day in the last year? February 9, 2021 — when Tesla announced a $1.5 billion purchase of the asset. On that day, around one out of every 42,500 tweets was about Bitcoin.