Stock Markets
Analysis-Institutional investors may help bitcoin sustain new heights
© Reuters. FILE PHOTO: A representation of bitcoin is seen in front of a stock graph and U.S. dollar in this illustration taken, January 24, 2022. REUTERS/Dado Ruvic/File Photo
By Hannah Lang and Suzanne McGee
(Reuters) – As traditional institutions pour money into bitcoin, the cryptocurrency’s latest meteoric rally to a record high may have more legs than in 2021, experts say.
The world’s largest cryptocurrency, notorious for its volatility, touched $69,202 on Tuesday, driven by excitement over new U.S. spot bitcoin exchange-traded funds (ETFs) and expectations the Federal Reserve will begin cutting U.S. interest rates this year.
Since bitcoin has less than two decades as a financial asset, predicting its price trajectory remains extremely challenging. Just months after retail exuberance helped drive bitcoin to its previous record in November 2021 the cryptocurrency crashed, taking half the crypto industry with it.
But more institutions committing long-term money could help the token sustain its high levels this time around, analysts and executives said.
“Traditional institutions were once sitting out; today, they are here in full force as the principal drivers of the crypto bull market,” said Nathan McCauley, CEO of Anchorage Digital, a crypto platform.
In February, for example, software firm MicroStrategy said it had bought about 3,000 bitcoins for $155 million, while social media platform Reddit disclosed it had bought small amounts of bitcoin and ether.
“The market is getting pushed around by some of the crypto industry whales,” said Steve Sosnick, chief strategist at Interactive Brokers (NASDAQ:), adding he expected a short-term pullback in bitcoin’s price as investors take profits.
Another driver of sticky money are 10 new U.S. bitcoin ETFs, which provide a regulated option for traditional institutions or other buyers who may now feel safer investing in the cryptocurrency.
has jumped more than 50% this year alone, with most of those gains coinciding with inflows into the new ETFs. Net flows into the products reached $7.9 billion as of Monday, according to BitMex Research.
Sui Chung, CEO of CF Benchmarks, which is providing the index for six of the ETF, said he knew of some registered investment advisors and other big institutions that were buying into the ETFs, although he declined to name them.
“For institutions, bitcoin’s core appeal is the diversification potential it offers,” he added.
Wealth manager Gerber Kawasaki has invested in BlackRock (NYSE:)’s spot bitcoin ETF via its AdvisorShares ETF, crypto outlet The Block reported last month. Such investors are typically less price sensitive, Bitfinex analysts wrote.
“Any decline following the top of the current cycle could be less drastic than previous downturns. We saw a similar stable trajectory in price after a huge increase following the launch of gold ETFs,” they added.
Indicators that other analysts have used to gauge retail interest in cryptocurrencies, like Google (NASDAQ:) searches, have remained muted compared to 2021 and 2022, according to Google trends.
Trading in CME Micro Bitcoin futures, which at 1/10th of a bitcoin are affordable to wealthier retail investors, jumped from 32,007 on Feb. 27 to nearly 87,000 on Feb. 28, CME data shows.
“If there is a retail frenzy, it started on Feb. 27th,” said Chung.
SUPPLY DYNAMICS
To be sure, Bitcoin just came into existence in 2008 and remains a speculative asset dominated by retail investors. Its short track record makes it hard to predict how it will trade over multiple economic cycles.
In contrast to commodities like gold, it has no economic fundamentals, so there is no reliable way to forecast its price, European Central Bank analysts warned last month.
Still, as with commodities, supply factors are at play.
One unknown is the potential price overhang from bitcoins trapped in bankruptcies that could be liquidated in coming months. As much as $35 billion worth of crypto was locked up in bankruptcies last year, although Reuters could not ascertain how much was in bitcoin.
On the other hand, the upcoming bitcoin “halving” is set to further reduce supply, ultimately capped at 21 million bitcoins. That process last occurred in 2020, meaning there is more pressure on bitcoin’s supply compared to the rally in 2021.
That could push prices higher, said Zach Pandl, managing director of research at Grayscale Investments, which operates one of the spot bitcoin ETFs.
“Bitcoin demand is colliding with increasingly tight supply,” he added.
By Maggie Fick and Ahmed Aboulenein
WASHINGTON (Reuters) – Members of Donald Trump’s presidential transition team are laying the groundwork for the United States to withdraw from the World Health Organization on the first day of his second term, according to a health law expert familiar with the discussions.
“I have it on good authority that he plans to withdraw, probably on Day One or very early in his administration,” said Lawrence Gostin, professor of global health at Georgetown University in Washington and director of the WHO Collaborating Center on National and Global Health (NS:) Law.
The Financial Times was first to report on the plans, citing two experts. The second expert, former White House COVID-19 response coordinator Ashish Jha, was not immediately available for comment.
The Trump transition team did not immediately respond to a Reuters request for comment.
The plan, which aligns with Trump’s longstanding criticism of the U.N. health agency, would mark a dramatic shift in U.S. global health policy and further isolate Washington from international efforts to battle pandemics.
Trump has nominated several critics of the organization to top public health positions, including Robert F. Kennedy Jr., a vaccine skeptic who is up for the post of secretary of Health and Human Services, which oversees all major U.S. health agencies including the CDC and FDA.
Trump initiated the year-long withdrawal process from the WHO in 2020 but six months later his successor, President Joe Biden, reversed the decision.
Trump has argued that the agency failed to hold China accountable for the early spread of COVID-19. He has repeatedly called the WHO a puppet of Beijing and vowed to redirect U.S. contributions to domestic health initiatives.
A WHO spokesperson declined to directly comment but referred Reuters to comments by WHO Director-General Tedros Adhanom Ghebreyesus at a press briefing on Dec. 10 in which he was asked whether he was concerned that the Trump administration would withdraw from the organization.
Tedros said at the time that the WHO needed to give the U.S. time and space for the transition. He also voiced confidence that states could finalize a pandemic agreement by May 2025.
Critics warn that a U.S. withdrawal could undermine global disease surveillance and emergency response systems.
“The U.S. would lose influence and clout in global health and China would fill the vacuum. I can’t imagine a world without a robust WHO. But U.S. withdrawal would severely weaken the agency,” Gostin said.
U.Today – MicroStrategy has made headlines again by purchasing 5,262 BTC for approximately $561 million at an average price of $106,662 per BTC. The company now holds a staggering 444,262 BTC, accumulated at a total cost of approximately $27.7 billion, with an average purchase price of $62,257 per BTC.
Despite impressive returns of 47.4% since the beginning of the quarter and 73.7% since the beginning of the year, skepticism about the company’s strategy is growing.
It is believed that to sustain its purchases, MicroStrategy raises capital through methods such as issuing convertible and corporate bonds, securing credit lines and selling shares.
This cycle appears to operate as follows: shares are sold to acquire the cryptocurrency, and the rising price per BTC increases asset value, enabling further loans, which are then reinvested in more purchases.
Some observers warn that a significant decline in Bitcoin’s price or MicroStrategy’s stock could trigger a cascade effect. A sharp fall in MSTR shares would weaken the collateral backing its loans, potentially leading to forced asset sales, including BTC.
This scenario could exert downward pressure on the broader cryptocurrency market, as the company holds 2.2% of the global Bitcoin supply now.
Thus, while some view Michael Saylor’s approach as a bold bid to cement the cryptocurrency’s role in the financial system, others see it as unsustainable. History offers a cautionary note: in 2000, MSTR shares surged to $333 before plummeting 99%, a collapse that took 24 years to recover from.
National homebuilder ranked No. 12 on inaugural list ranking companies based on trust
SCOTTSDALE, Ariz., Dec. 23, 2024 /PRNewswire/ — With a longstanding reputation for trust, national homebuilder and land developer Taylor Morrison (NYSE:) (NYSE: ™HC) has been recognized by Forbes on their inaugural list of the Most Trusted Companies in America. The homebuilder ranked No. 12 out of 300 companies across all industries.
“There are few things more powerful than trust and it’s something we strive to earn amongst all company stakeholders, from our customers to our team members, our shareholders, and our local communities,” said Taylor Morrison Chairman and CEO Sheryl Palmer. “To be included on this esteemed list in its inaugural year is especially meaningful and these awards are important reminders of the relationships we’re building across all aspects of our business.”
Fueled by hundreds of millions of data points, the Most Trusted Companies in America list combines data on a wide range of factors across four categories: employee trust, customer trust, investor trust and media sentiment. The ranking was created in partnership with research companies HundredX, Signal AI and Glassdoor.
Taylor Morrison also earned the No. 67 spot on Forbes’ inaugural America’s Best Companies list. The ranking is Forbes’ most comprehensive company ranking to date and factored in ratings for financial performance, customer and employee satisfaction, cybersecurity, sustainability, companies’ remote work policies, media coverage and more. Forbes’ America’s Best Companies list assessed more than 60 metrics across 11 primary categories to identify which organizations excel across the board. Of the more than 2,000 U.S.-based publicly traded companies that were eligible, only 300 qualified for each list.
In addition to being named among the Most Trusted and Best Companies in America by Forbes, Taylor Morrison holds several additional accolades including being named on Newsweek’s America’s Most Responsible Companies and America’s Greenest Companies lists, U.S. News & World Report’s Best Companies to Work For list, the American Opportunity (SO:) Index, America’s Most Trusted ® Home Builder for nine years, Hearthstone’s 2021 BUILDER Humanitarian Award, and inclusion on the Fortune 500 list since 2021.
About Taylor Morrison
Headquartered in Scottsdale, Arizona, Taylor Morrison is one of the nation’s leading homebuilders and developers. We serve a wide array of consumers from coast to coast, including first-time, move-up, luxury and resort lifestyle homebuyers and renters under our family of brands”including Taylor Morrison, Esplanade and Yardly. From 2016-2024, Taylor Morrison has been recognized as America’s Most Trusted ® Builder by Lifestory Research. Our long-standing commitment to sustainable operations is highlighted in our annual Sustainability and Belonging Report.
For more information about Taylor Morrison, please visit www.taylormorrison.com.
CONTACT:
media@taylormorrison.com
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