SkyBridge has invested USD 182 million in Bitcoin on behalf of its customers. The halving event has been the biggest catalyst for Bitcoin’s bullish cycle, according to the firm.

Hedge fund management firm SkyBridge Capital recently claimed that Bitcoin (BTC) adoption, both individual and institutional, is growing faster than its supply. Besides, they described the pioneering cryptocurrency as digital gold, with several characteristics that surpass physical gold.

“Near-zero interest rates and unprecedented money printing pose an existential risk for 60/40 portfolios. Also, they provide a premium on scarce assets such as gold, real estate, and Bitcoin,” noted SkyBridge Capital.

The firm highlighted that a decentralized public ledger supports the holding of Bitcoin, and that cryptography rather than a central authority supports it. SkyBridge added that, in the last year, in particular, there have been advances in regulations and in Bitcoin’s infrastructure itself.

For example, they cited the authorization of the US Office of the Comptroller of the Currency to several banks to offer cryptocurrency custody programs to their customers and the offer to buy and sell Bitcoin that PayPal initiated last November.

Wall Street Welcomes Bitcoin

SkyBridge stated that Bitcoin has gained respectability among institutional investors, which they summarized by saying that “Wall Street welcomes Bitcoin.” To reinforce this assertion, the firm added quotes from JPMorgan, BlackRock, Citibank, Deutsche Bank, and Morgan Stanley, among others, who highlight the potential of Bitcoin as a store-of-value asset or as a means of portfolio diversification.

The investment firm then pointed to twelve institutional investor announcements that occurred in 2020, as a sign of the growing interest in Bitcoin for the aforementioned purposes.

The most prominent Bitcoin acquisitions are those of MicroStrategy and Square, which lead to the use of Bitcoin as a corporate treasury reserve. Likewise, well-known mutual fund managers such as Paul Tudor Jones and Stan Druckenmiller decided to invest percentages of their assets in Bitcoin.

SkyBridge showed some details of its Bitcoin fund and claimed that it has invested USD 182 million in it on behalf of its customers.

In recent days, the investment firm notified the SEC that it had created a Bitcoin fund with a minimum participation of USD 50,000.

Bitcoin Is More Gold Than Gold Itself

“Bitcoin is digital gold, and as such it is better gold than gold itself,” said SkyBridge. Although both can coexist, the tendency that “the winner takes everything” marks the history of money,” according to the firm.

SkyBridge explained that a central point about the supply of Bitcoin is that Satoshi Nakamoto set it at 21 million units. The company clarified that there are currently about 18.5 million BTC in circulation. They estimate that there are 120 years to mine the remaining 2.5 million BTC.

The Demand for Bitcoin Exceeds Its Supply

Bitcoin’s third halving, which occurred in May, brought the daily supply to 900 BTC. That represents 27,000 BTC monthly and 82,200 BTC quarterly, SkyBridge noted.

During the fourth quarter of the year, BTC acquisitions exceeded USD 4 billion. Estimating the average price of Bitcoin to be USD 20,000, such acquisitions would represent around 200,000 BTC. In other words, institutional demand alone nearly tripled the amount of BTC mined during the fourth quarter of 2020.

Several institutions announced their Bitcoin acquisitions during the third quarter. Among them, SkyBrige mentioned Grayscale (who bought more than USD 1 billion worth of Bitcoin), PayPal (who acquired USD 600 million worth of Bitcoin), and English fund manager Ruffer Investment Company (who bought USD 744 million worth of Bitcoin).

SkyBridge predicted that this acceleration in institutional investment and tight supply will cause the trend to intensify and the sectors that have so far not participated will join in. For example, they claim that the insurance sector will turn to invest in Bitcoin, as will the treasuries of public companies and pension funds.

By Alexander Salazar

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