On March 10th, Bitcoin once again surpassed $55,000 in the morning.
The blessings of major institutions have contributed to this. In the United States, Bitcoin is being introduced into mainstream asset allocation, which mainly includes institutions represented by Tesla. In Asia, the first regional shot was Meitu. On March 7, Meitu, a Hong Kong-listed company, announced that it had purchased US$22.1 million in ether and US$17.9 million in bitcoin in open market transactions on March 5, 2021, at a cost of approximately 260 million yuan. This makes Meitu the first Chinese listed company to publicly announce large-scale purchases of Bitcoin and Ethereum. Cai Wensheng, the helm of Meitu, later said in the circle of friends: “This time the purchase of cryptocurrency is used as a value reserve for the long-term development of the blockchain strategy. Someone must be the first to eat the crab.” The industry generally believes that, influenced by Meitu, subsequent purchases of crypto Currency Hong Kong stock companies will increase. This has made a case for the subsequent entry of domestic institutions into cryptocurrency, and also allowed Ethereum to be included in the vision of the strategic reserves of large institutions. From a regional perspective, behind the active entry of these institutions is a shift and change around BTC chips. The purchase of cryptocurrencies by listed companies has spread rapidly from Wall Street. From North America to Asia, a route for transferring BTC assets between institutions has become clear.
“More than one beautiful picture”
In the face of Meitu’s latest trends, the founder of Binance Exchange, Changpeng Zhao, tweeted: “Many Asian companies already own Bitcoin, they just don’t make it public.” Indeed, the current Meitu has been labeled as the “Hong Kong version of Tesla”. In the previous period, many listed companies in the United States, the United Kingdom, Germany and other countries and regions have chosen cryptocurrencies for asset allocation. According to data collected by the authoritative BTC holding ranking website KevinRooke, among BTC holdings, there are 21 listed companies and 6 non-listed companies, accounting for 0.824% and 1.008% of the total Bitcoin supply respectively. Among them, Meitu’s BTC holdings ranked 12th, and the top listed companies mainly include the famous MicroStrategy, Tesla, Galaxy Digital Square, etc., as well as a large number of Bitcoin mining institutions in North America. In this website, most of the data update time is concentrated in the second half of 2020, and the data sources are mostly the public information of the market and various companies.
The mainstream view is that beginning in August last year, market conditions brought about by institutions gradually exploded. The business intelligence software MicroStrategy, a Nasdaq-listed company, announced its entry into the Bitcoin market and has become an important vane in the market. The SEC (United States Securities and Exchange Commission) and the audit department approved MicroStrategy to include Bitcoin on its balance sheet. This means that under the supervision of the SEC, Microstrategy can learn from the way that Microstrategy buys Bitcoin as a balance sheet and complies with the accounting and legal standards disclosed by listed companies. Driven by listed companies such as Tesla and MicroStrategy, more and more listed companies in North America are beginning to follow suit. Some traditional listed companies have begun to switch to Bitcoin at the business level and asset reserve level.
Soon, payment company Square began to follow suit, investing 1% of the company’s total assets in Bitcoin. In late October of the same year, PayPal also announced its official entry into the Bitcoin industry, allowing users to directly purchase cryptocurrencies such as Bitcoin. U.S. listed companies interested in Bitcoin continued to increase in February this year. According to recent SEC documents, U.S. listed company Immersion Technology (code: IMMR) indicates that it may choose to buy Bitcoin and other encrypted assets in the future; Urban Tea, the parent company of Mingyuntang, a Chinese tea brand listed on NASDAQ, also announced that it will launch a key strategic expansion in blockchain and crypto asset mining. On the other hand, mining companies in the United States and North America are also running into the field. North American mining companies represented by Marathon Patent Group, ranked No. 4 above, are constantly buying mining machines.
In addition, the founder of Grayscale’s parent company DCG recently announced the establishment of the largest Bitcoin mining pool in the United States. It can be seen that the North American mining infrastructure represented by the United States is becoming stronger, and the overseas market is gradually expanding its share of computing power. BitDeer CEO Meng Xiaoni told the media recently that according to their calculations, it is expected that by the end of 2021, overseas computing power may increase to 40%, and China’s computing power will drop to about 60%.
Many actions show that Bitcoin is no longer limited to small-scale capital participation. Institutional entry, asset hedging, hedging and arbitrage, coupled with a loose monetary macro environment. On Wall Street in the United States and North America, encryption and traditional financial markets were the first to be linked. What can be seen is that in this round of big market, large institutional investors have played a very important role, and it is also an important factor in Bitcoin’s historical breakthrough. To some extent, institutional investors and high-net-worth individuals have led this market, and they tend to be more inclined to hold Bitcoin for a long time.
Bitcoin is transferring
The chief economist of Chainalysis once believed that the market was driven by North American institutional investors. Data shows that North American exchanges have received a net inflow of Bitcoin from other regions of the world, and the number of transfers worth $1 million or more sent by exchanges this year has increased by 19%. Over the past year or so, the Bitcoin holdings in Asia have fallen by more than 400,000 coins, and the Bitcoin holdings in North America (represented by the United States) have increased by more than 600,000 coins.
Recently, overseas are still exploring and expanding the market for compliance with digital assets. In mid-February this year, the first Bitcoin ETF in North America was approved for listing, and the first Bitcoin exchange-traded fund (BTCC) in North America launched by Purpose Investments was approved by the Canadian financial regulator and was traded on the Toronto Stock Exchange on February 18. The transaction started. The fund is sold in Canadian and U.S. dollars. The trading volume on the first day reached 200 million Canadian dollars (about 155 million US dollars), breaking the Canadian record.
According to Reuters reports on the 2020 crypto market trends, last year, the interest of institutions from North America surged, which promoted the transformation of Bitcoin transactions, and became the largest participant in this round of gains last year. At the same time, the number of Asian investors who are the main driving force for the rise of Bitcoin prices in 2017 is decreasing. North American investors were the biggest players in last year’s gains. After a large number of institutions have entered the market, American investors have gradually ceased to worry about compliance. A large part of the community believes that BTC is basically well-oriented and the pricing power of BTC is shifting to Wall Street. Asian institutional channels are opening
Is it time for Asian institutions to enter? As the price of Bitcoin continues to break through, capital power is still attracting more listed companies and institutions to join the Bitcoin market. Facing the enthusiasm of overseas institutions for Bitcoin, Asian institutions have also begun to take action.
On March 4, Huobi Technology Holdings Co., Ltd. issued an announcement stating that its wholly-owned asset management subsidiary, Huobi Asset Management, has been approved by the Hong Kong Securities Regulatory Commission to allow the issuance of funds with 100% virtual assets.
Huobi Asset Management will issue three virtual asset funds: Bitcoin Tracking Fund, Ethereum Tracking Fund and Multi-Strategy Virtual Fund. Huobi co-founder Du Jun publicly stated: In the United States, institutions represented by Tesla are gradually introducing Bitcoin into mainstream asset allocation. Coinbase, a licensed digital currency exchange in the United States, has officially submitted a prospectus, stepping forward In the last step, Nasdaq is also attracting blockchain companies to join, which will affect the Asian region and also affect the development trend of the blockchain industry. This shows that both blockchain and digital asset investment are gradually entering the mainstream field. From the perspective of the industry, this is a typical Asian “interface” between traditional capital markets and digital assets.
Some people believe that the Securities Regulatory Commission approved Huobi to launch a virtual currency fund. This inspiration may come from the world’s first Bitcoin ETF (BTCC), from Grayscale in the United States to Purpose and Evolve in Canada, to Huobi in Asia, and Bitcoin. The currency is crossing the market and transforming into mainstream investment targets, and it has also allowed Asian institutional investors to re-examine such assets.
On March 9, Malaysia BCMG Genesis also announced the launch of the Bitcoin Fund (BGBF-I). According to the official, this was launched in response to the growing demand for institutional encryption products in Southeast Asia, with the IBH Investment Bank acting as the main advisor to the fund. After the “gray effect” spread to Wall Street, the actions of Asian institutions have also become an important observation direction for the market. The launch of Bitcoin and Ethereum fund products will attract more traditional funds to enter, thereby boosting the prices of mainstream projects. Li Lianxuan, chief researcher of Ouke Cloud Chain, believes in public comments that the purchase of cryptocurrencies by Meitu is a follow-up effect caused by the former Tesla’s investment in cryptocurrencies.
Meitu also left the market with new expectations in its public information: According to a cryptocurrency investment plan previously approved by the company’s board of directors, Meitu can purchase cryptocurrencies with a net value of no more than 100 million U.S. dollars, and the funds come from the company’s current Some cash reserves. From this point of view, Meitu’s investment in virtual currencies may still be “increased.” From investment giants to listed companies, and from North America to Asia, this kind of institutionalized buying craze for Bitcoin has emerged a new trend. How institutions in the Asian region will react requires us to look forward to and observe together.
Author/ Translator: Jamie Kim
Bio: Jamie Kim is a technology journalist. Raised in Hong Kong and always vocal at heart. She aims to share her expertise with the readers at blockreview.net. Kim is a Bitcoin maximalist who believes with unwavering conviction that Bitcoin is the only cryptocurrency – in fact, currency – worth caring about.