What is a digital currency worth? If it has President Donald Trump’s name on it, the answer right now is more than $7 billion. Despite years of shouting about a decentralized revolution, it’s a reminder that frothy and baseless memes keep flourishing. Even BlackRock boss Larry Fink, steward of a $60 billion bitcoin ETF, is getting bullish, telling the Davos crowd that the OG cryptocurrency could more than quintuple in value if big sovereign wealth investors pile in. It’s a fine line to be treading. In their 2025 outlook, Goldman Sachs strategists put it bluntly: Bitcoin is “a speculative digital asset more suited to gambling than

The price of bitcoin reached US$68,420 as of 18 October, up 13.5% since 10 October and 54.8% since the beginning of the year. The surge began after the US Securities and Exchange Commission (SEC) gave approval for eleven bitcoin exchange-traded funds to track the cryptocurrency in January, allowing many new investors to enter the crypto market.  Last week the SEC went further by granting ‘accelerated approval’ for the funds to list and trade options tied to spot bitcoin prices on the NYSE. The 50-basis-point cut in US interest rates last month has also played its part in bolstering the attractiveness

Republican presidential nominee Donald Trump once professed himself “not a fan” of bitcoin; now, he says he will end the U.S. government’s “anti-crypto crusade.” Digital currencies have indeed strained against regulators wary of a speculative free-for-all. Those restraints loom over the debut of new funds tied to ether, the second-largest cryptocurrency, which are held back from offering certain sweeteners. If Trump wins in November, loosening limitations on these crypto-for-the-masses products from Fidelity, BlackRock and their ilk seems an obvious target. The giants of exchange-traded funds, which command trillions of investor dollars, already brought bitcoin closer to the adults’ table of finance by

MicroStrategy’s co-founder Michael Saylor once ran a humdrum little software firm. Then, for a moment, his company was worth many billions of dollars – or, rather, for three moments. After a dizzying rise and fall in the dot-com bubble and another after the pandemic, his company’s shares have now more than doubled this year. This latest spike is tied to a bitcoin-buying binge funded in part by bonds that can convert into stock. Unlike GameStop or other meme-crazed run-ups, though, this one is a dicey deal with Wall Street. The company began hoarding bitcoin in August 2020 and ramped up

Alan Lane’s dreams may have collapsed, but his bank has not. Silvergate Capital, a deposit-taker for cryptocurrency firms, said on Thursday that it had been forced to raise funds in a hurry and flog assets after digital-asset customers pulled almost 70% of their balances. It’s a disaster for Lane and his investors. For the U.S. banking system and households who rely on it, there is much to reassure. What happened to Silvergate was a classic – and these days rare – bank run. Deposits from crypto firms fell to $3.8 billion in December from $11.9 billion in September. The panic was partly

Combining blank checks and cyber coins always seemed like a bad idea. So did matching long-term assets with relatively short-term money, as with the $125 billion Blackstone Real Estate Investment Trust. But what’s scarier for investors is the prospect of blowups in areas they thought were safe. That’s the next shoe to drop. The manifestation of far-fetched financial ideas came to an end on Monday, when cryptocurrency group Circle Internet Financial called off its merger with a special-purpose acquisition company. The so-called stablecoin issuer, which had a small stake in bankrupt crypto exchange FTX, probably didn’t belong on public markets given regulatory uncertainty and

Cryptocurrency ventures can divide and conquer Washington’s regulatory fiefdoms. The U.S. Federal Reserve staked out its turf this week, telling lenders to notify it if they offer services for bitcoin and its ilk. Other agencies are also wrestling to oversee the $1 trillion market. The scrap provides an opportunity for some industry participants, but it hurts token owners. The central bank’s move is aimed at bringing more crypto activities under its purview. Because of murky rules or outright prohibitions, such as traditional banks being banned from directly trading digital assets, lenders have been wary of wading too far into the

MicroStrategy, read literally, means a very small amount of strategy. That seems right. The company with that name, a software firm, has lost over $1 billion after founder Michael Saylor made an unusual, debt-funded bet on holding cryptocurrency. Yet investors are valuing the company at more than the sum of its parts when they should probably be doing the opposite. Saylor’s company has lost 70% of its market value this year and was worth $4.2 billion on Wednesday evening including net debt. For that, an investor gets a claim on MicroStrategy’s store of over 129,000 bitcoins as of the end

Stablecoins are failing to live up to their name. TerraUSD, one of the many cryptoassets whose value was supposedly pegged to the U.S. dollar, imploded last week. And tokens issued by $80 billion behemoth Tether, also linked to the greenback, briefly traded at 95 cents. Wobbly “safe” assets may be a feature, not a bug, of the cryptocurrency world. Granted, the two cases are different. Terra, which had $18 billion of digital coins in circulation in early May, utterly failed. Its value relied on trading incentives that became self-destructive. Tether, which claims to be backed by real-world financial assets, allowed holders

Tuesday, October 19, marked the official launch of the new ProShares Bitcoin Strategy ETF (BITO). The long-awaited cryptocurrency ETF marks the first of its kind to list on a U.S. exchange. BITO was listed on the New York Stock Exchange (NYSE) following a 75-day review by the SEC. Several other similar futures-based products are due to launch over the next few weeks. The CEO of ProShares, Michael Sapir, emphasized this milestone by saying, “1993 is remembered for the first equity ETF, 2002 for the first bond ETF, and 2004 for the first gold ETF. 2021 will be remembered for the

Even the cryptocurrency market has to go one step at a time. ProShares’ new bitcoin exchange-traded fund is a first in the United States. But it invests in bitcoin futures, not the actual digital coins. ETFs designed to own actual crypto assets are still on hold at the Securities and Exchange Commission. How the fund launched on Tuesday goes may help regulators decide whether to take that next step. While other funds exist that offer exposure to bitcoin, this is the first ETF, a structure that allows trading throughout the day like listed-company shares. True believers in cryptocurrencies might prefer

Cryptocurrency businesses are getting big enough to have their problems spill over into the broader financial system. Yet U.S. regulators aren’t keeping up. U.S. Securities and Exchange Commission Chair Gary Gensler told the Financial Times on Wednesday that digital asset trading platforms are now a $2 trillion industry while some coins, like Tether, are backed by fiat currencies. Regulators need to get on the horn reigning in assets. So-called stablecoins, or cryptocurrencies that are backed by assets like the dollar or euro, may not be so secure in a crisis. Many issuers claim they have the funds on hand to