Q3 Bitcoin News Update
Bitcoin had a choppy Q3 up 1% with prices staying range bound between $18,000 to $25,000 per coin. Despite the lack of price volatility, the Viridi team was excited by some key announcements and newsworthy statements made during the quarter. A year ago, the Viridi team was concerned about the lack of access avaliable for institutional investors and how this could hinder the growth of Bitcoin adoption as a whole. However, some news items this past quarter have led Viridi to believe that adoption will continue at a rapid rate over the next year. This quarter we bring exciting articles that directly impacts asset managers, brokerages, and exchanges.
The first piece of exciting news we saw included a partnership that bolstered cryptocurrency access for institutions between Blackrock and Coinbase. This partnership will focus on connecting Aladdin, Blackrock’s end-to-end investment management platform, with Coinbase Prime, an institutional focused tool that allows for advanced agency trading, custody, and many other features. Our view is that increased integrations for cryptocurrency adoption as a whole will positively increase Bitcoin adoption at the institutional level as well.
Additionally, Nasdaq has announced that it will launch a cryptocurrency custody service as it “aims to cash in on demand from instituional crypto investors.” The continued view from top tier financial firms that Bitcoin and cryptocurrency demand will continue to rise is a key point that the Viridi team believes in as well. In our view, these investments are only undertaken by companies if they have justified a positive ROI outlook for crypto adoption in the future. Our assumption is that more financial institutions will continue to build out cryptocurrency products in the next year as they start analyzing the ROI associated with these products.
Along with instituional investors, Fidelity is considering adding Bitcoin trading specifically to their brokerage platform. Fidelity has over 34.4 million brokerage accounts and allowing these accounts to have simple and easy access to trade Bitcoin will be a significant boon for Bitcoin adoption. Currently, retail investors have to look for options on other platforms and can not invest in Bitcoin through their normal brokerage accounts. The house view on this is extremely positive as we believe that increased access and education for retail investors on Bitcoin will be well received. It should be noted that this is still a topic under consideration and will be watched closely going forward.
Although we have not seen a strong rise in Bitcoin price this quarter, we are still excited by the news and commitments of companies. Viridi continues to believe that the Bitcoin network is a powerful and growing protocol that is supported by the Bitcoin miners. Additionally, the Bitcoin dominance metric still comes in at above 40%, signaling that many investors still consider Bitcoin to be a strong asset to invest in relative to other cryptocurrencies.