The ultimate impact of Bitcoin and other cryptocurrencies on investment markets remains something of an open question.
In a matter of days, Bitcoin has collapsed from its all-time high above $64,000 to around half of that, followed by a partial rebound to around $38,000. All of that volatility has undercut any “use case” among corporate leaders, Peter Tchir notes on RealMoneyPro, reviewing the linkage between cryptocurrencies and stocks for investors.
Fair enough, unless you’re a pipeline that needs to pay a ransom to hackers that have locked up your systems, as the Colonial Pipeline company reportedly had to do to restore gas and jet fuel deliveries to most of the East Coast.
Seedy transactions aside, Bitcoin continues to have limited links with the financial world writ large.
Coinbase (COIN) - Get Coinbase Global Inc Report, which went public earlier this year via a SPAC is one notable name whose fate is obviously tied to the currency. Tesla (TSLA) - Get Tesla Inc. Report CEO Elon Musk maintains a curious fixation on Bitcoin and Dogecoin in particular. Musk loudly proclaimed his company would accept bitcoin payments earlier this year, only to reverse track this month, helping to send it into its tailspin. (OK. China’s crackdown probably didn’t help either.)
Major credit card issuers like Mastercard (MA) - Get Mastercard Incorporated Report and Visa (V) - Get Visa Inc. Report have also moved to support payments using some cryptocurrencies on their massive networks.
JPMorgan Chase is reportedly working on developing a bitcoin fund for investors that could be rolled out this summer, though the Bank's CEO, Jamie Dimon, remains steadfastly disinterested, telling a Wall Street Journal CEO gathering recently that he is not a supporter and has no interest in it, CNBC reported.
Overall, Bitcoin in particular remains a highly speculative financial animal, prone to heavy leveraging – hence the volatility. TheStreet.com’s Jim Cramer argues that now is the time for U.S. regulators to take a stand as well.
Amid all the sturm and drang, Bitcoin itself took a breather on Tuesday, edging lower after its double-digit percentage rebound.