In brief

  • A series of high profile investors announced they have made significant investments in Bitcoin.
  • Bitcoin trading volume doubled after the news was released.
  • Wall Street continues its record breaking run as the Fed promises more support well into 2021.

Bitcoin whales are like buses, you wait for one, and then three come along all at once. The result of which has caused Bitcoin to scream past the mythical $20,000 number all the way into the $23,000s. 

The first was Ruffer LLP, a London based investment firm. Yesterday the company had revealed it had quietly allocated $744 million (a mere 2.5% of the firm’s total fund) to Bitcoin

The second was American Express. The company’s investment arm, American Express Ventures, has doubled down on its original $17 million investment in FalxonX, a crypto trading platform for institutional investors. 

The last, and perhaps the most significant whale, was Eric Peters, CEO of One River Asset Management. He set up a separate firm, One River Digital to make an initial investment of $600 million in cryptocurrencies, moving up to $1 billion in early 2021. 

Peters had been secretly buying Bitcoin up until November, presumably to keep the cost of acquisition low by not alerting his investor peers. 

Peters is the investment industry’s canary in a coal mine. His private weekly investment newsletter, Weekend Notes, is read by a group of investors who between them have their fingers on the purse strings of $1 trillion worth of assets. What Peters does is mirrored by others. 

Which is probably why Bitcoin trading volume exploded in the last 24 hours. In fact, volume doubled,  according to data providers Nomics, and it wasn’t just bot trading either. ‘Transparent volume’ is a measure of money movements that can be verified, and that amount of verifiable trading activity doubled.  

Trading volume exploded yesterday. IMAGE: Nomics

The inflows of cash were seen across the industry. Global market cap was up 13% to $650 billion, with the largest gains in XRP (up 22%), Hex (up 20%), Litecoin (up 15%), and Stellar (13%). 

What’s making crypto so attractive to institutional investors? “It’s a combination of multiple factors: bonds are yielding negative rates, interest rates in the developed world are at or below zero, the increase in money supply has devalued fiat values and inflation could be round the corner,” says a spokesperson for AAX, the world’s first digital asset exchange powered by the London Stock Exchange.

In essence, crypto is the only asset class delivering returns above and beyond any other, and the whales want in. 

Fed promises to keep the lights on pushing markets ever higher 

Over on Wall Street, the Nasdaq ended yesterday's session at a record high and the S&P 500 closed just shy of a record of its own. The stellar performance was in response to the Federal Reserve doubling down on its commitment to prop up the economy via its asset purchase program.

In recent months, the Fed has been aggressively buying US Treasury bonds and mortgage-backed securities to the tune of $120 billion per month. The most recent announcement signals that the Fed will continue this policy way into next year.

With that re-assurance, markets all ticked up-Bitcoin has also benefitted from the decision too. But the trickle-down effect continues to struggle to reach the high street. Retail sales in America continue their slide - last month's figures were the worst for seven months - and the number of Americans filing for unemployment benefits ballooned by 800,000 last month.

This year is turning into a tale of two pandemics.

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