Bloomberg) -- Bitcoin touched the $50,000 level in Asia trading, riding a broad resurgence in risk assets, with Citigroup Inc. and Goldman Sachs Group Inc. warming up to the largest cryptocurrency.
The digital asset climbed as much as 2.8% Tuesday, and was holding at $49,080 as of 9:05 a.m. in Hong Kong. Prices last week suffered the worst decline since March and dipped as low as $43,000 on Sunday. Bitcoin climbed to a record $58,350 on Feb. 21.
Bitcoin and other cryptocurrencies are drawing increasing attention from mainstream financial institutions and Wall Street players, alongside a growing focus from goverment regulators as well, as the nascent industry’s outlook continues to be subject to furious debate. Proponents point to growing institutional adoption while detractors warn prices are in a speculative bubble.
Cboe Global Markets Inc. disclosed it is seeking approval to list and trade shares of what could be the first Bitcoin exchange-traded fund in the U.S., according to a Monday regulatory filing. Meanwhile New York Attorney General Letitia James issued an investor alert on the industry, warning consumers about its susceptibility to “speculative bubbles” and abuse by criminals.
In a report by Citigroup’s Global Perspectives & Solutions, strategists laid out a case for Bitcoin to play a bigger role in the global financial system, saying the cryptocurrency could become “the currency of choice for international trade” in the years ahead. Bitcoin has advantages over the current global payment system, such as its decentralized design, lack of foreign exchange exposure and traceability, the strategists said.
Goldman is restarting a trading desk for cryptocurrencies, a person familiar with the effort said. The Wall Street bank will begin offering Bitcoin futures among other products by mid-March after halting a similar effort started in 2018, according to the person, who asked to to be named because the plans haven’t been announced.
“The more banks that come out with constructive comments on Bitcoin, the more likely the speculative bubble will continue to grow,” said Ed Moya, senior market analyst for OANDA.
Citigroup’s full-throated backing of Bitcoin shows that crypto is continuing to win over the world’s biggest financial institutions. Dan Loeb, head of Third Point LLC, said in a Twitter post that he’s been “doing a deep dive into crypto lately,” adding that “it is a real test of being intellectually open to new and controversial ideas.”
While banks continue to dip their toes deeper into the world of digital assets, a small group of corporations are busy snapping up coins to add to their balance sheets. MicroStrategy Inc., announced Monday that it purchased an additional 328 Bitcoins, increasing its pile to about 90,859. The company’s holdings are now worth over $4 billion.