Bitcoin critics protest it has no meaningful use other than being an asset to hold. Does that matter?
Bitcoin offers no yield, no dividend and still can’t be used for most practical purposes, but that hasn’t deterred increasingly eager investors. Up almost 50 per cent since Donald Trump’s election victory, the $100,000 milestone is in sight.
Investors expect another Trump presidency to ease regulatory scrutiny. Mr Trump’s administration is crypto-friendly, featuring advocates like incoming commerce secretary Howard Lutnick. Proposals for a US bitcoin reserve, akin to gold reserves, have gained traction.
Unlike past rallies, the recent ascent is driven by individual and institutional interest. More money is invested in BlackRock’s iShares bitcoin exchange-traded fund (ETF) than in its gold equivalent. A UK pension fund recently became the first in the country to invest in bitcoin, with pension specialists Cartwright saying it could follow a similar adoption curve to equities in the 1970s or high-yield bonds in the 1980s.
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Institutional involvement is making crypto investments more mainstream and less risky to ignore. The end result: a digital asset that has proven you don’t need a practical use case to be a lucrative investment.
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