Crypto Markets Getting 'Big Push,' 100x Group CEO Says
Bitcoin rebounded from earlier losses amid a broader recovery in risk assets after a report showed the U.S. added more jobs than forecast last month. MicroStrategy Inc. bought more of the world’s largest cryptocurrency.
The digital asset shed as much as 3.4 per cent on Friday before trading little changed at about US$48,150 as of 9:02 a.m. in New York. The Bloomberg Galaxy Crypto Index, which includes Bitcoin and four other tokens, slipped more than 4.7 per cent before turning little changed.
MicroStrategy snapped up an additional 205 Bitcoins at an average price of US$48,888, according to a filing. That brings the company’s holdings of Bitcoin to about 91,064 tokens, worth over US$4 billion.
Bitcoin is now some US$10,000 below February’s record above US$58,000, stoking the debate over whether the token’s investment base will widen or peter out as happened in the 2017 boom and bust.
Payrolls increased 379,000 after an upwardly revised 166,000 January increase, according to a Labor Department report Friday. Economists in a Bloomberg survey projected a 200,000 February gain. The unemployment rate dropped to 6.2 per cent.
Overall risk appetite in markets took a knock Thursday after Federal Reserve Chair Jerome Powell refrained from pushing back against the recent climb in long-term borrowing costs.
Long-time proponent Michael Novogratz at Galaxy Digital Holdings Ltd. remains bullish, reiterating a prediction Thursday that Bitcoin will probably hit US$100,000 before the end of the year. He argued in a Bloomberg TV interview that it and other digital currencies have become “an institutional asset class” and banks are “frantically” trying to get in on the action.
Bitcoin slid 21 per cent last week but is still up more than fivefold in the past year. On one narrative, the token can hedge inflation risk and the debasement of fiat currencies -- akin to gold -- and is set become a bigger part of institutional portfolios. A rival view depicts a stimulus-fueled bubble set to pop.
“We’re still at an early stage in the institutional adoption of crypto in asset allocation,” a team led by Inigo Fraser-Jenkins, head of global quantitative strategy at Sanford C. Bernstein in London, wrote in a note Friday. But the team added that a fundamental valuation of Bitcoin is “simply impossible.”