Mega bank JP Morgan commented on Square's recent decision to buy $50 million in Bitcoin. The bank sees it as being supportive of Bitcoin prices, and may lead to more purchases by Square in the future. JP Morgan also sees the move by Square as the opening of a new move into Bitcoin by other companies, which may want to buy now before the prices move up. Over the summer MicroStrategy, a market intelligence firm, bought $425 million in Bitcoin, which it sees as a superior asset to fiat currency in an inflationary environment. The bank also noted that options on Bitcoin in the USA are popular, although many buyers are opting for actual Bitcoin.
Why it matters: There has been little attention paid to Bitcoin by institutional investors until this year. While there were a few people in the mainstream financial community that were attracted to decentralized assets, there now appears to be a bigger movement into the space. In fact, Iran recently dedicated power plants to mining Bitcoin, which marks a new era of state sponsored Bitcoin mining, which is an obvious positive for the network. As more social issues are addressed by creating and spending fiat currency, major tokens like Bitcoin should rise in value when measured in fiat currency terms.
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