Luno – a digital asset exchange based in Malaysia – has released a statement explaining that the institutional interest that drove bitcoin’s meteoric price spikes during 2020 is likely to last throughout this new year.
Luno Says Institutional Love of BTC Will Last Through 2021
During 2020, many large institutional firms – including MicroStrategy, MassMutual and Stone Ridge – invested hundreds of millions of dollars into the world’s largest digital currency by market cap. The idea was that inflation was on the rise thanks to the ongoing coronavirus pandemic, and as a result, bitcoin was now on the same level as gold and a serious way to keep one’s wealth stable and sturdy during times of economic strife.
BTC was no longer being viewed simply as a speculative asset. It was now a store of wealth; a hedge tool, if you will, that could ensure one’s finances were well protected.
The country manager of Luno – Aaron Tang – explained:
The recent news that the S&P Dow Jones Indices will debut cryptocurrency indices in 2021 should put cryptocurrency in front of even more investors daily. It is something that has been spoken about for the longest time. However, 2020 appeared to be the tipping point. The year when institutions really started to invest significant amounts of money into cryptocurrency. We expect this trend to continue in 2021.
In addition, Tang commented that bitcoin’s Google searches were considerably higher in 2020 than they were three years ago, when bitcoin had reached its “old” all-time high of $19,000+. During that time, the bitcoin price spike was largely driven by retail investors who were going crazy for initial coin offerings (ICOs). These token offerings have since taken on new meaning considering how many were fake and fraudulent, and this may have helped contribute to the massive losses traders witnessed the following year in 2018.
But Tang, however, says that this time around was completely different, and that institutions were the primary force rather than retailers behind the spike. He says:
We believe a continued increase in media attention would certainly change this, but perhaps even more important is that it’s now much easier than ever to buy bitcoin. not only are there platforms such as Luno that are supporting customers around the world, but also the likes of PayPal and Square are seeing huge success in the U.S.
Blockchain Is Becoming Stronger
He further states that the coronavirus pandemic, which has forced a lot of people into lockdown status, is ensuring that people stay home and utilize new forms of technology to accomplish goals and meet certain needs for themselves. He mentions:
As cryptocurrencies and digital assets gain further traction, they will continue to attract attention from regulators. Progressive regulations are crucial for the healthy growth of any industry. We hope regulators will continue to balance the need for rules with space for innovation to happen.