Wall Street Can No Longer Dismiss Bitcoin, Demand is Too High
It has become increasingly difficult for Wall Street to dismiss Bitcoin
and the cryptocurrency markets, given the $95 bln market cap of Bitcoin, rapidly rising user bases of cryptocurrencies, and the increasing mainstream adoption of Bitcoin as a robust store of value. Up until a few months ago, the vast majority of Wall Street analysts, bankers, and investors dismissed Bitcoin, describing it as a bubble, in an identical way the technology sector continued to condemn Amazon since its launch in 1997.
But, as the user base and market cap of Bitcoin and the rest of the cryptocurrency market soared, it has become challenging for Wall Street to blindly ignore the market, being fully aware that their failure to adopt Bitcoin and cryptocurrencies may result in the isolation of banks and financial institutions in the long-term from the promising cryptocurrency market.
Many billionaire investors and major financial institutions such as Mike Novogratz, Kyle Bass, and Goldman Sachs have decided to embrace Bitcoin and the cryptocurrency market, rather than compete against it. Notably, earlier this month, the market cap of Bitcoin surpassed that of Goldman Sachs, nearing towards the $100 bln mark. Ami Ben David, co-founder of venture capital fund Spice, told FT
in an interview:
“A year ago they didn’t know about it, six months ago they thought it was a scam and now they realise they simply just don’t understand it and are starting to get nervous and want to learn about it. There is definitely an element of FOMO. People have been told by their advisers, ‘Don’t touch it! It’s a bubble!’, and now they are upset they might have already missed it.”
Acknowledging the rapid increase in demand for Bitcoin, Paul Vigna of The Wall Street Journal reported that Goldman Sachs has been preparing to launch a cryptocurrency trading platform to address the interest towards Bitcoin from its clients and consumers in the traditional finance sector. “Goldman’s effort involves both its currency-trading division and the bank’s strategic investment group, the people said. That suggests the firm believes Bitcoin’s future is more as a payment method rather than a store of value, like gold,” wrote Vigna.
Entrance of institutional investors
Last week, billionaire hedge fund legend Mike Novogratz revealed his newly established fund that will focus on Bitcoin and the cryptocurrency market in the next few years. He further emphasized in an interview with CNBC that along with major investment firms such as Fidelity, a few large institutional investors are preparing to engage in the Bitcoin and cryptocurrency markets. “I can hear the herd coming. I was just in San Francisco, met with a few big institutional investors and they’re still a ways away, but they’re coming. Lots of funds are being raised and so I’m pretty confident to say that it [Bitcoin price] is going higher,” said Novogratz.
Gates Foundation Launches Blockchain-based Mobile Payments Solution
The Bill and Melinda Gates Foundation has launched
the Mojaloop open-source payments software to provide an interoperability layer between financial institutions, payment providers, and other companies offering payment services to the poor and unbanked people around the world. The mobile payments system employs the Interledger technology that was developed by distributed ledger technology (DLT) startup Ripple.
According to the foundation’s deputy director of financial services for the poor, Kosta Peric, the new software is aimed at resolving the issues with respect to the interoperability of digital payments. He also issued an invitation to players in the banking and payments industries to
test the system.
"Interoperability of digital payments has been the toughest hurdle for the financial services industry to overcome. With Mojaloop, our technology partners have finally achieved a solution that can apply to any service, and we invite banks and the payments industry to explore and test this tool.”
Aside from Ripple, the foundation was also supported by several financial technology companies in developing the software. The application was developed under the group’s Level One Project, which is an umbrella program for the foundation’s work with the unbanked, poor people that allowed it to explore disruptive technologies such as Blockchain. Under the project, several mobile phone technology providers, namely, Huawei, Ericsson, Mahindra Comviva, and Telepin, have contributed to the development of an open application programming interface (API) to speed the pace of integrations of digital payments services providers.
The Gates Foundation’s works on Blockchain
The Bill and Melinda Gates Foundation has been exploring ways to use the Blockchain technology under the Level One Project since 2015. Among the initiatives is the possible use of the technology to bridge or link the disconnected financial systems.