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This article first appeared in the Morning Brief. Get the Morning Brief delivered straight to your inbox Monday through Friday before 6:30 a.m. ET. Subscribe
Tuesday, August 24, 2021
A “maximalist” view of bitcoin means that every business will be a crypto business.
Oh what a difference a summer made.
Bitcoin’s slow but steady rebound (BTC-USD) from its spring lows saw the crypto unit hit $ 50,000 on Monday, with the latest move greased by PayPal’s (PYPL) announcement that it would let customers UK-based trading crypto, which US customers had already offered since October.
It looks like it was yesterday (May, to be exact) when the impromptu remarks by Tesla CEO (TSLA) Elon Musk ricocheted through the crypto market, igniting the fuse of a sale that ultimately resulted in the bitcoin at its 2021 nadir below $ 30,000.
At the time, Paul Donovan, chief economist at UBS Global Wealth Management, said the episode served as a “reminder that while a person can significantly change purchasing power, the” stable store of value “criterion of a currency is not filled. “
Indeed, skeptics have used a multitude of aphorisms and adjectives to describe bitcoin (billionaire investor Warren Buffett prefers “rat poison”, for example). “Stable” is certainly not one of them, as the digital coin is subject to dramatic, sometimes double-digit daily price swings that belies its aspirations to become a reliable store of value to compete with the US dollar.
The latest move punctuates a particularly busy time for digital currency and crystallizes something that even its biggest detractors must recognize. Cryptocurrency in general, and bitcoin in particular, have gained main currency (pun intended) across all industries.
PayPal’s move is “a sign that every company will eventually become a crypto firm – they just don’t know it yet,” Meltem Demirors, chief strategy officer at CoinShares, told Yahoo Finance Live on Monday. “And I think this trend is just beginning.”
She was only half joking. In addition to the PayPal movement, Wall Street is making crypto increasingly accessible to its customers, while Facebook (FB) is also making its own ripples in the industry (albeit with a scaled-down version of its original large design). Separately, trading platforms are clearly reaping the benefits of trading in crypto (looking at you, Robinhood (HOOD)).
“Crypto is not a fad. There are elements of that, sure, that seem a bit speculative and bubbly… but if we zoom out and look at the secular trend over 10, 20 years… we see crypto as a fundamental part of this new digital world ” , Demirors added.
It goes to the heart of what famous Bitcoin evangelist and crypto investor Anthony Pompliano wrote in a letter to subscribers on Monday. Showing poetry about how digital currencies ushered in a ‘money revolution’, Pompliano presented a vision in which maximizing the use of crypto (i.e. ‘maximalism’) will ultimately make prices much less wrong.
“The crazy part is if monetary maximalism ends up playing the way I think it does, bitcoin will end up being incredibly stable in value. The price of goods and services will be denominated in bitcoin and the average bitcoin holder will not see any level of volatility, ”Pompliano wrote.
“When this happens, people will have a choice of simply spending less than they earn in an effort to save bitcoin. Or they will be available to invest in other assets in order to acquire more bitcoin than what is needed. ‘they would just be allowed to save,’ he added.
Certainly, the sparkling price of bitcoin and its lack of convertibility in most common transactions (think paying rent, buying coffee, and dining out, for example), leaves a lot to be desired for the average citizen. And polls suggest they still aren’t true believing sidekicks like Pompliano and Demirors.
Yet the resilience of the digital coin is not to be despised. With all due respect to the Oracle of Omaha, its growing credibility with investors large and small is a sign of its maturation, according to Chris Kline, COO and co-founder of Bitcoin IRA.
“The widespread adoption of crypto is going from governments to large corporations, further legitimizing the seriousness of digital assets,” Kline told Yahoo Finance in an email.
“Make no mistake, the world wants crypto to stay. Additionally, you are seeing the adoption of crypto for use in payments, real estate, and art, which are contributing to the growing value of digital assets, ”he added.
Through Javier davidYahoo Finance editor-in-chief replaces Myles Udland, who will return tomorrow. Follow him on Twitter: @Teflongeek
What to watch today
Economy
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10:00 am ET: Richmond Fed manufacturing index, August (25 expected, 27 in July)
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10:00 am ET: New Home Sales, month on month, July (3.6% expected, -6.6% in June)
Earnings
Pre-marketing
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6:30 am ET: Advanced auto parts (PAA) Expected to Report Adjusted Earnings of $ 3.03 per Share on Revenue of $ 2.65 Billion
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7:00 am ET: Best Buy (BBY) Expected to Report Adjusted Earnings of $ 1.87 per Share on Revenue of $ 11.55 Billion
Post market
Politics
Top news
FDA approval of Pfizer vaccine already paves the way for warrants [Yahoo Finance]
Bitcoin Price Holds Near $ 50,000 As Hash Rate Improves [Yahoo Finance UK]
Musk says Tesla’s autonomous driving software update ‘isn’t great’ [Reuters]
U.S. Vice President Harris meets with business executives in Singapore to discuss supply shortages [Reuters]
Yahoo Finance Highlights
COVID Delta fears unleash short sellers on these stock sectors
Fed cutbacks in bond purchases could put pressure on the stock market: Jeffrey Gundlach
New study paints disastrous picture for unmasked and unvaxed children
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