Los Angeles (CoinChapter) – The price of Bitcoin recently crashed below $50,000 for the first time in over a month. The pullback occurred just weeks after the leading cryptocurrency hit a year-to-date high of $64,895.
Some analysts feared it was the start of a larger decline. But Bitcoin has since gained back some of those losses and is trading above the threshold again.
Even with the recent drop, there’s no denying Bitcoin has performed exceptionally well in 2021. The largest crypto by market cap entered the year with a price just under $30,000. Through the first four months, it is now almost double that.
All signs point to Bitcoin continuing its roll as 2021 progresses. Macroeconomic investors have purchased a total of $14.4 billion worth of inflation-protected treasuries to date.
These inflation-linked bonds (ILBs) are securities designed to help protect investors from inflation. They are most commonly issued by sovereign governments such as the United States and United Kingdom.
ILBs are indexed so that the principal and interest payments correlate with the rate of inflation. This is a signal that markets are heavily skewed toward a rise in inflation.
Such can be attributed to the crypto market booming this year. In addition to Bitcoin reaching new highs, the same can be said for other digital assets like Ethereum.
Their limited quantities are attractive to investors and serve as a hedge of inflation. Inflation can occur for various reasons, including policies implemented by the Federal Reserve. As well as rising government debts.
Inflation concerns making Bitcoin attractive to major companies
The rising prospect of inflation has led major companies to invest billions in Bitcoin. Electric car manufacturer Tesla, for example, poured $1.5 billion into Bitcoin earlier this year.
The company reportedly has already netted a profit of $1 billion. It now also accepts BTC as a payment method for its vehicles.
Business analytics firm MicroStrategy additionally has purchased well over $2 billion worth of Bitcoin since last August. CEO Michael Saylor is a longtime advocate of crypto and held a conference called “Bitcoin for corporations” earlier this year to attract more institutional investment.
Banking institutions
In addition to companies adding Bitcoin to their balance sheets, some major banking institutions are warming up to the crypto as well.
Morgan Stanley added three Bitcoin funds to its investment platform in a move that would enable its rich clients to gain exposure to the emerging cryptocurrency market.
Likewise, JPMorgan plans to launch a new product that will give investors exposure to cryptocurrencies. A filing with the SEC shows that the bank will create a “basket of companies with exposure to cryptocurrency.”
