The sudden rise of Bitcoin’s value this week is attributed to the news that BlackRock, the high ranking asset-management firm, has set up a group to research into cryptocurrencies and blockchain technology.
Compared to the prices on Monday, Bitcoin’s value rose by 5 percent on Tuesday; the current market value is around $6,720. The data is taken from CoinDesk which tracks numerous crypto-exchanges.
Ethereum and Ripple also show growth; the coins are the second and third highest ranking digital assets by market capitalization. Both Ethereum and Ripple show a 6 percent increase in value.
The news that BlackRock is venturing into crypto and blockchain technology was confirmed by CEO Larry Fink – “We are a big student of the blockchain.”
Fink had previously shown reluctance towards the crypto-market saying – “I don’t believe any client has sought out crypto exposure.” The current working group will bring about a huge change in BlackRock’s involvement in the field.
In fact, the working group is not even a new development; the BlackRock group looking into blockchain technology and cryptocurrencies has existed since 2015.
Showing further promise on the cryptocurrency front, Fortune magazine reported today that the hedge-fund billionaire Steve Cohen’s firm, ‘Cohen Private Ventures’ invested a cryptocurrency-focused investment fund – Autonomous Partners.
The current improvement in institutional investors’ involvement in cryptocurrencies will have a positive effect on the crypto-market and increase participation from the general public.
The senior market analyst at eToro, Mati Greenspan said –
“It definitely is causing some excitement. The idea of big financial firms moving into crypto certainly isn’t new, and this is a trend we’ve been noticing gaining since November.”
The doubtful speculations surrounding digital currencies are caused by the excessive volatility of the market. The wild price swings have been beneficial to some and shattering to others. The value of Bitcoin rose to $20,000 last year and has declined since.
Financial regulations surrounding the crypto-market are also a reason for the declining values. Yet, on a positive note, many players have decided to go ahead with cryptocurrency investments and blockchain technology implementations. The involvement of major institutional firms in the field will definitely further the crypto-market, as is apparent from the performance of Bitcoin this week alone.