Bitcoin hits record high of $62,575

LONDON (Reuters) – Bitcoin hit a record of $62,575 on Tuesday, extending its 2021 rally to new heights.

The world’s biggest cryptocurrency has more than doubled in price this year amid growing mainstream acceptance as an investment and a means of payment, and as investors seek high-yielding assets amid low interest rates.

Major firms including BNY Mellon, Mastercard Inc and Tesla Inc are among those to have embraced or invested in cryptocurrencies.

Reporting by Thyagaraju Adinarayan and Tom Wilson, Editing by Iain Withers

HSBC bans customers from buying bitcoin-backer MicroStrategy shares

LONDON (Reuters) – HSBC has banned customers of its online share-trading platform from buying or moving into their accounts MicroStrategy Inc stock, a message seen by Reuters showed, calling it a “virtual currency product”.

The bank will not facilitate the buying or exchange of products related to or referencing the performance of virtual currencies, the message to an HSBC InvestDirect client said. Bitcoin is the largest and best-known virtual currency.

MicroStrategy declined to comment. The U.S. business software firm is led by bitcoin proponent Michael Saylor and owns bitcoin worth billions of dollars.

While HSBC will allow the holding, sale and outgoing transfer of MicroStrategy shares, it will forbid new purchases or incoming transfers, said the message dated March 29.

“HSBC has no appetite for direct exposure to virtual currencies and limited appetite to facilitate products or securities that derive their value from VCs (virtual currencies),” HSBC said in a statement.

HSBC InvestDirect is available to customers in countries including Canada and Britain.

The bank said its policy towards cryptocurrencies had been in place since 2018 and is kept under review. It could not immediately say which countries the ban applied to.

The move comes amid a growing embrace of cryptocurrencies by large financial firms, companies and investors seeking yield in a world of ultra-low interest rates.

Goldman Sachs Group Inc said last month it would offer investments in bitcoin and other digital assets to its wealth management clients. Morgan Stanley has also started offering clients investments to the emerging asset class.

MicroStrategy has along with Tesla Inc and payments firm Square Inc become one of several publicly listed U.S. companies to buy large amounts of bitcoin for its treasury.

MicroStrategy said last week it owns around 91,579 bitcoins. Its holdings, worth around $5.5 billion according to a Reuters calculation, are equal to around 80% of its $6.8 billion market capitalisation.

Reporting by Tom Wilson; Editing by David Holmes

Cryptocurrency inflows hit all-time high of $4.5 billion in first-quarter: Coinshares

NEW YORK (Reuters) – Inflows into cryptocurrency funds and products hit a record $4.5 billion in the first quarter, suggesting increased institutional participation in the once-maligned sector, data from digital currency manager Coinshares showed on Tuesday.

The first quarter inflows represented an 11% increase from the last three months of 2020, which hit $3.9 billion.

Investments into crypto, however, slowed in the first quarter compared with the fourth, where growth was 240%, data showed. Coinshares said in the report, however, that this was not “indicative of a broader slowing trend, as quarterly growth rates tend to be highly varied.”

On Monday, the cryptocurrency sector hit an all-time peak of $2 trillion in market capitalization. Bitcoin’s market cap was more than $1 trillion, holding that milestone level for one whole week.

“There’s so much momentum that’s building and people are scrambling to see where the other coins, aside from bitcoin, are going,” said Edward Moya, senior market analyst at online FX trading platform OANDA.

Bitcoin had the most inflows in the first quarter with $3.5 billion, according to the Coinshares data, followed by ethereum, which posted $765 million in investments.

The largest cryptocurrency in terms of market cap hit a record high of $61,781.83 in mid-March, but has since traded in a narrow range as investors consolidated gains.

Crypto assets under management have also surged to a peak of $59 billion, CoinShares data showed. Last year, assets under management for the sector hit $37.6 billion.

Grayscale is still the largest digital currency manager, with $46.1 billion in assets, while CoinShares, the second biggest and the largest European digital asset manager, oversees about $5.1 billion in assets.

Of the $59 billion in assets under management, active investment managers represented just 1.5% of total assets under management, down from 3.6% at the start of the fourth quarter last year.

Total market volumes remained high during the quarter, averaging $11.6 billion per day, compared with $3.5 billion in the last three months of 2020.

Exclusive: Bitcoin jumps to one-week high above $58,000

LONDON (Reuters) – Bitcoin jumped to a one-week high on Monday, rising as much as 4.5% to $58,300 and nearing a record high above $61,000 hit earlier this month.

Visa Inc said earlier it would allow the use of cryptocurrency to settle transactions on its payment network, the latest sign of growing acceptance of digital currencies by the mainstream financial industry.

Bitcoin: Cryptocurrency future – Galaxy Digital’s Novogratz predicts

Bitcoin investing picture images

Wealthy baby boomers will be the next generation to jump into cryptocurrencies as they become more mainstream, potentially bringing billions of dollars to the rallying sector, said Mike Novogratz, founder of crypto firm Galaxy Digital.

“It could be as much as a trillion dollars comes over the next year from that giant group of wealth,” said Novogratz, who used to run hedge funds for investment giant Fortress, in an interview at Reuters Digital Assets Week.

Moves by major banks and trading platforms to begin offering cryptocurrency products to rich customers will likely spark the rush from wealthy baby boomers, Novogratz predicted.

Morgan Stanley this month become the first big U.S. bank to offer its wealthy clients access to bitcoin funds, including Galaxy Digital.

“The money will start coming in early next month,” he said of the Wall Street bank’s move.

Baby boomers, born roughly from the end of World War Two to the mid-1960s, have been the chief beneficiaries of massive stimulus programmes that have pumped up asset values since the 2008-9 global financial crisis.

Bitcoin powered to a record of nearly $62,000 this month, the latest milestone in a meteoric rise driven by growing adoption from major companies such as Tesla Inc and the embrace of bigger U.S. investors.

Yet most of the interest has so far come from younger investors comfortable with the concept of digital assets.

Many of them see bitcoin both as an asset that can dramatically appreciate in value and also one that can protect savings from the threat of inflation sparked by money printing.

Bitcoin, originally designed as a way to pay, is less of a currency than an asset that works best to store value, said Novogratz, a vocal proponent of cryptocurrencies.

“If you’re worried that the U.S. is printing too many dollars…you’re going to shift some of your savings into bitcoin.”

Crypto firm Blockchain.com raises $300 million, valued at $5.2 billion

Cryptocurrency firm Blockchain.com said on Wednesday it had raised $300 million in its latest funding round at a valuation of $5.2 billion.

The round was led by DST Global, Lightspeed Venture Partners and VY Capital, the London-based company said

Blockchain.com offers digital wallets for storage of cryptocurrencies as well as retail trading and other services for larger investors.

Bitcoin soared to a record just shy of $62,000 this month as mainstream firms and investors increasingly embrace cryptocurrencies, leading to ballooning valuations of related companies.

Blockchain.com said last month it raised about $120 million, with investments from Alphabet Inc’s venture capital unit.

Elon Musk: you can now buy Tesla cars with bitcoin

Tesla Inc chief Elon Musk said on Wednesday the company’s electric vehicles can now be bought using bitcoin and the option will be available outside the United States later this year.bitcoin.

“You can now buy a Tesla with bitcoin,” he tweeted here on Wednesday, adding that bitcoin paid to Tesla will not be converted into conventional currency.

VIEW FULL TWEETS ON TWITTER

The electric-car maker had last month said it bought $1.5 billion of bitcoin and would soon accept it as a form of payment for cars, sending the price of the world’s most popular cryptocurrency soaring.

Musk, who has been promoting cryptocurrencies through his Twitter account, had last month criticized conventional cash, saying when it “has negative real interest, only a fool wouldn’t look elsewhere.”

He had said that the difference with cash made it “adventurous enough” for the S&P 500 company to hold the cryptocurrency.

Following Tesla’s investment in bitcoin, several companies, including Uber Technologies Inc and Twitter Inc had shared their views on the cryptocurrency. reut.rs/3cg9gMP

Uber Chief Executive Dara Khosrowshahi said the ride-hailing company discussed and “quickly dismissed” the idea of investing in bitcoin. However, he added that Uber could potentially accept the cryptocurrency as payment.

Twitter had said earlier it was still undecided in holding bitcoin, while General Motors Co said it will evaluate whether bitcoin can be accepted as payment for its vehicles.

Tesla recently added “Technoking of Tesla” to Musk’s list of official titles.

Bitcoin takes breather after retreat from record near $62,000

TOKYO (Reuters) – Bitcoin consolidated around $60,000 on Monday, taking a breather from the weekend’s record high as investors prepared for inflation worries and U.S. stimulus spending to propel it even higher.

The world’s most popular cryptocurrency slipped as low as $58,956.90 early in the Asian session, falling from Saturday’s record high of $61,781.83.

The rally may have been dampened by a Reuters report that India would pursue a ban on digital assets, a rain cloud for bitcoin following high-profile endorsements this year from the likes of Tesla’s Elon Musk, Twitter’s Jack Dorsey, and investment giants Goldman Sachs and BlackRock.

Bitcoin has more than doubled in 2021, after quadrupling last year.

“Investment by institutional investors and corporates is increasing. It’s what I call the financialisation of bitcoin,” said Masafumi Yamamoto, chief currency strategist at Mizuho Securities.

“It’s becoming an asset that investors can no longer ignore.”

Bitcoin’s weekend surge was helped by an improvement in risk appetite in financial markets after President Joe Biden signed his $1.9 trillion fiscal stimulus package into law and ordered an acceleration in vaccinations.

That momentum carried into thinner markets on the weekend, with technical factors magnifying the move higher, according to Justin d’Anethan, sales manager at digital asset company Diginex in Hong Kong.

“The crypto market is derivatives heavy,” he noted.

“A small move up triggered many liquidations throughout Saturday and Sunday, thus becoming a not-so-small move.”

Seth Melamed, the Tokyo-based chief operating officer of cryptocurrency exchange Liquid, said legislation of the sort India is proposing won’t be an impediment to further gains for bitcoin.

“Because it’s decentralised, government bans or acceptance is somewhat irrelevant,” Melamed said. “Capital will find a way.”

What are NFTs and why are they worth millions?

A digital-only artwork has sold at Christie’s auction house for an eye-watering $69m (£50m) – but the winning bidder will not receive a sculpture, painting or even a print.

Instead, they get a unique digital token known as an NFT.

Where Bitcoin was hailed as the digital answer to currency, NFTs are now being touted as the digital answer to collectables.

But there are plenty of sceptics who think it is all a bubble that is going to burst.

What is an NFT? 

NFT stands for non-fungible token.

In economics, a fungible asset is something with units that can be readily interchanged – like money.

With money, you can swap a £10 note for two £5 notes and it will have the same value.

However, if something is non-fungible, this is impossible – it means it has unique properties so it cannot be interchanged with something else.

It could be a house, or a painting such as the Mona Lisa, which is one of a kind. You can take a photo of the painting or buy a print but there will only ever be the one original painting.

NFTs are “one-of-a-kind” assets in the digital world that can be bought and sold like any other piece of property, but they have no tangible form of their own.

The digital tokens can be thought of as certificates of ownership for virtual or physical assets.

How do NFTs work?

Traditional works of art such as paintings are valuable because they are one of a kind.

But digital files can be easily and endlessly duplicated.

With NFTs, artwork can be “tokenised” to create a digital certificate of ownership that can be bought and sold.

As with crypto-currency, a record of who owns what is stored on a shared ledger known as the blockchain.

The records cannot be forged because the ledger is maintained by thousands of computers around the world.

NFTs can also contain smart contracts that may give the artist, for example, a cut of any future sale of the token.

What’s stopping people copying the digital art?

Nothing. Millions of people have seen Beeple’s art that sold for $69m and the image has been copied and shared countless times.

In many cases, the artist even retains the copyright ownership of their work, so they can continue to produce and sell copies.

But the buyer of the NFT owns a “token” that proves they own the “original” work.

Some people compare it to buying an autographed print.

People are paying millions of dollars for tokens?

Yes. It’s as wild as it sounds.

How much are NFTs worth?

In theory, anybody can tokenise their work to sell as an NFT but interest has been fuelled by recent headlines of multi-million-dollar sales.

On 19 February, an animated Gif of Nyan Cat – a 2011 meme of a flying pop-tart cat – sold for more than $500,000

A few weeks later, musician Grimes sold some of her digital art for more than $6m

It is not just art that is tokenised and sold. Twitter’s founder Jack Dorsey has promoted an NFT of the first-ever tweet, with bids hitting $2.5m. 

Christie’s sale of an NFT by digital artist Beeple for $69m (£50m) set a new record for digital art.

But as with crypto-currencies, there are concerns about the environmental impact of maintaining the blockchain. 

Is this just a bubble?

A day before his record-breaking auction, Beeple – whose real name is Mike Winkelmann – told the BBC: “I actually do think there will be a bubble, to be quite honest.

“And I think we could be in that bubble right now.” 

Many are even more sceptical.

David Gerard, author of Attack of the 50-foot Blockchain, said he saw NFTs as buying “official collectables”, similar to trading cards. 

“There are some artists absolutely making bank on this stuff… it’s just that you probably won’t,” he warned. 

The people actually selling the NFTs are “crypto-grifters”, he said. 

“The same guys who’ve always been at it, trying to come up with a new form of worthless magic bean that they can sell for money.” 

Former Christie’s auctioneer Charles Allsopp said the concept of buying NFTs made “no sense”.

“The idea of buying something which isn’t there is just strange,” he told the BBC.

“I think people who invest in it are slight mugs, but I hope they don’t lose their money.”

Remote Siberian data center reaps rewards of bitcoin rally

MOSCOW (Reuters) – Four thousand kilometres from Moscow near the shores of the Angara River, a Russian firm operating a vast data centre run on cheap local hydroelectric power is reaping the rewards of bitcoin’s surging prices and plans to double its power output this year.

BitRiver hosts equipment at its flagship 100-megawatt data centre in the city of Bratsk, along with other smaller sites, for foreign miners of the cryptocurrency from the United States, Europe and Japan who want to harness the region’s cheap energy.

The company could already be responsible for as much as 2% of global bitcoin mining, Chief Executive Igor Runets estimated, but added precise figures in the sector were hard to come by.

The price of bitcoin has risen almost 300% since the start of November and topped $50,000 dollars for the first time last month, as Tesla Inc bought $1.5 billion worth of bitcoin and other large companies and investment houses followed small traders into the asset.

Bitcoin is earned — or ‘mined’ — by using your computer to help process the uncrackable “blockchains” or digital transaction records that underpin the currency.

This requires huge computing capacity, and a lot of electricity, and so is mostly done with huge machines in aircraft hangar-sized warehouses in the cooler climates of Iceland, Canada, northern China and Russia, where it costs less to disperse the heat generated.

The rewards for those who can verify transactions in the process which produces bitcoins have never been greater.

“Current demand from our clients exceeds 700 megawatts and is approaching one gigawatt,” said Runets. “We will of course continue to build data processing centres. In 2021, we plan to reach 300 megawatts of power.”

Another 100-megawatt centre is already under construction in the neighbouring Buryatiya region, Runets said.

Big deals with foreign firms, such as one last December which saw 14 lorries full of equipment arrive in Bratsk, can boost the local economy and are a sign that BitRiver has become a global player, he said in a company video.

BITCOIN VOLATILITY

Russia granted cryptocurrencies legal status last year, but banned them from being used as a means of payment.

“Current legislation in Russia does not hamper us in any way,” Runets said. “It allows us to host foreign clients’ computing equipment on Russian territory with settlements for this in dollars or roubles.”

This arrangement reduces the financial impact of bitcoin price swings on BitRiver.

“When bitcoin falls or rises, my profit, my revenue remains almost unchanged,” Runets said. “This financial stability in a volatile market is very valuable.”

More liberal legislation would lead to greater investment from Russian players, Runets added, which could help BitRiver improve on its 2.5x year-on-year revenue growth in 2020. He declined to disclose further financial details.

One of the primary concerns levelled at bitcoin miners is their carbon footprint. Runets said BitRiver uses more than 90% green power as it builds data centres in regions with electricity surpluses and renewable energy sources nearby.

Russia accounts for about 7% of the world’s bitcoin mining, according to Alexander Brazhnikov, executive director of the Russian Association of Cryptoeconomics, Artificial Intelligence and Blockchain, a figure that does not include grey-market players and those illegally connecting to power grids.

Kazakhstan is responsible for a similar figure, while China is the market leader.