Can Bitcoin touch $55000?

Ever since Satoshi Nakamoto wrote the Bitcoin whitepaper in 2008, it has mainly been retail investors who have shown an interest in this asset class. Institutions have kept their distance. This however seems to be changing. I argue below that since institutions control the bulk of investible assets, even minimal interest from them, as they learn to maneuver the world of cryptos, could lead to Bitcoin touching $55,862.

Why have institutions have stayed away from bitcoin for so long?

1. Regulatory Compliance — Institutions are subject to stringent compliance standards and crypto regulation has been fairly unclear. The legal and compliance departments of asset management firms are likely not supporting this asset class even if the fund managers are convinced.

2. Criminal Nexus- Governments have viewed cryptos with suspicion as its privacy protection properties have been exploited by criminals and terrorists to buy drugs and arms, among other unsavory items. Clearly, no institution wants to give governments a reason to go digging into their books.

3. Investment infrastructure — Support like custody services for crypto assets was unavailable till recently.

A few brave firms have been unable to resist the opportunity though

=> MicroStrategy announced in September that it has purchased a total of $425mn worth of bitcoin. Fun fact- The co-founder of MicroStrategy back in 2013 had written a tweet — “#Bitcoin days are numbered. It seems like just a…