After heavy speculation over the past few days regarding whether bitcoin could break newfound resistance levels, the currency has spiked to approximately $9,561 at press time. This is the highest point for bitcoin since it struck $9,000 in mid-March, and it looks as though $10,000 may be right around the corner.
Perhaps the biggest pusher for bitcoin has been Goldman Sachs. The company will soon be opening a bitcoin trading operation, according to New York Times journalist Nathaniel Popper. It is alleged to be the first bitcoin trading platform in cahoots with a Wall Street bank.
Goldman executive Rana Yared admits that not everyone on the staff was thrilled about the notion of joining hands with bitcoin. Given the currency’s volatile nature and price swings, executives were skeptical at first, and felt like the risk level was possibly too high.
“I would not describe myself as a true believer who wakes up thinking bitcoin will take over the world,” she explained in a recent interview. “For almost every person involved, there has been personal skepticism brought to the table.”
However, Yared mentioned that what initially led to the decision was customer behavior, and their desire to add cryptocurrency holdings to their portfolios. The executive admits they just didn’t have the heart to say “no.”
“It resonates with us when a client says, ‘I want to hold bitcoin or bitcoin futures because I think it is an alternative store of value,’” Yared further stated. “It is not a new risk that we don’t understand. It is just a heightened risk that we need to be extra aware of here.”
The move will undoubtedly bring more legitimacy to the cryptocurrency arena, and potentially open the doors for more institutions like Goldman Sachs to enter the virtual asset space.
In addition, a new report published by Forbes suggests that three things are happening in the world of cryptocurrency that may cause further price spikes this year. For one thing, bitcoin is becoming far more mainstream, and adoption is at an all-time high. Retailers and investors alike see bitcoin as a valid store of value and as a proper medium of exchange.
The second thing is that institutional capital is regularly making its way into cryptocurrency index funds. “At this stage, institutional investors hold the key to bitcoin’s growth,” says Darren Marble of CrowdfundX. “Concerns around liquidity, security, counterparty risk and custody of assets have so far prevented institutional investors from buying bitcoin or decentralized exchanges.”
Third – bitcoin is leading to the proliferation of crypto-related exchange-traded funds (ETFs). “Crypto-related exchange-traded funds may allow for simpler trading through brokerage accounts, which would also contribute to hiked up prices for bitcoin and other cryptocurrencies,” explains Chris Kline, co-founder and COO of BitcoinIRA.com. “The writing is on the wall. With so much momentum surrounding bitcoin and other digital currencies, in my opinion, it is only a matter of time before prices start to rebound again.”
And with that, we can confidently say that prices are already rebounding, as $10,000 could be reached as early as this week. What a solid way to enter the second quarter.