After a sudden sell-off in the crypto market during the past few weeks, there has been a bounce back. Consider that Bitcoin has since moved above $50,000, which is a critical level.
Keep in mind that there continues to be growing institutional interest in the category – and it seems like the momentum will continue. For example, BlackRock (NYSE:BLK) recently added Bitcoin futures to two of its funds. There has also been interest from some of the world’s top hedge fund operators like Stanley Druckenmiller and Paul Tudor Jones.
But there is something else that is helping to drive demand: wider acceptance of crypto. In fact, some of the world’s well-known companies are making moves in the market.
So let’s take a look:
- Tesla (NASDAQ:TSLA)
- Microsoft (NASDAQ:MSFT)
- Mastercard (NYSE:MA)
- Virgin Galactic Holdings (NYSE:SPCE)
- PayPal (NASDAQ:PYPL)
- Shopify (NYSE:SHOP)
Crypto: Tesla (TSLA)
Early this year, Tesla purchased $1.5 billion in Bitcoin, which helped to propel the massive rally. This move was primarily in anticipation of the company accepting crypto payments for the purchase of its vehicles and other products.
According to a filing with the SEC: “[W]e updated our investment policy to provide us with more flexibility to further diversify and maximize returns on our cash that is not required to maintain adequate operating liquidity. As part of the policy, we may invest a portion of such cash in certain specified alternative reserve assets.”
Of course, there was an additional risk factor added. It mentioned that – because of the volatility and indefinite-lived nature of digital currencies – there was the potential for impairment charges.
Microsoft has been accepting Bitcoin since 2014. This was for the purchase of an assortment of digital assets like apps, games and software.
But in 2018, Microsoft suspended the payments system because of the extreme volatility of Bitcoin. But this was for a temporary period of time.
Recently, Microsoft President Brad Smith talked about Bitcoin – and he tamped down rumors that the company would acquire the digital currency for its own balance. Instead, Microsoft will likely remain as an intermediary, at least for now.
Twitch, which is owned by Amazon (NASDAQ:AMZN), is a leading video streaming service. The focus is primarily on esports, which is a fast-growing market.
Since 2014, the company has accepted Bitcoin (this was through BitPay). Although, in 2019, Twitch temporarily shut down this service because of the volatility. But it resumed it after a few months.
If anything, Twitch has since become a major proponent of crypto. Last year, the company launched a new program to provide subscribers a 10% discount if they used certain digital currencies for purchases.
Crypto: Mastercard (MA)
In early February, Mastercard made a major announcement: the company was planning to upgrade its massive network to allow for crypto payments. But there was no a launch date. Rather, the company says the system changes will be made some time this year.
One of the main reasons the company made the move was due to the rising use of credit cards to purchase crypto assets. Yet the company will only focus on those cryptocurrencies that meet strict requirements, such as for security, compliance and liquidity.
The Mastercard announcement noted: “Our philosophy on cryptocurrencies is straightforward: It’s about choice. Mastercard isn’t here to recommend you start using cryptocurrencies. But we are here to enable customers, merchants and businesses to move digital value – traditional or crypto – however they want. It should be your choice, it’s your money.”
Virgin Galactic Holdings (SPCE)
Virgin Galactic Holdings, which is backed by super entrepreneurs like Sir Richard Branson and Chamath Palihapitiya, is a space tourism company. For up to $250,000, you can take a flight to an altitude of 50,000 and experience weightlessness. And yes, you can pay for this with Bitcoin.
Interestingly enough, in 2014 when Tyler and Cameron Winklevoss did this – their Bitcoin was valued at $800. No doubt, they should have used cash instead.
The value of the Bitcoin would be worth More than $15 million today. In a tweet, Tyler Winklevoss said, “I won’t make that mistake again.”
In October 2020, PayPal announced that it would allow it users to buy, sell and hold a limited number of cryptocurrencies from the mobile app (Venmo was included). The service was rolled out in the U.S. market and certain foreign markets.
This made it possible to transact in Bitcoin with more than 26 million merchants on the PayPal network. The company partnered with Paxos Trust to provide for some of the underlying infrastructure.
In a statement, PayPal CEO Dan Schulman said, “The shift to digital forms of currencies is inevitable, bringing with it clear advantages in terms of financial inclusion and access; efficiency, speed and resilience of the payments system; and the ability for governments to disburse funds to citizens quickly. Our global reach, digital payments expertise, two-sided network, and rigorous security and compliance controls provide us with the opportunity, and the responsibility, to help facilitate the understanding, redemption and interoperability of these new instruments of exchange.”
Crypto: Shopify (SHOP)
Shopify operates one of the largest e-commerce platforms for merchants. For last year, the company posted $2.9 billion in revenue, up a sizzling 86%. The company’s market capitalization is $149 billion.
Shopify is also an early adopter of cryptocurrency. Back in 2013, it started to accept Bitcoin for its customer websites.
Since then, the company has been aggressive in bolstering this business. For example, it entered an agreement with CoinPayments in June 2020. This has added hundreds of altoins to the platform and more than 100 payment gateways from credit cards from all over the world.
On the date of publication, Tom Taulli did not have (either directly or indirectly) any positions in any of the securities mentioned in this article.
Tom Taulli (@ttaulli) is the author of various books on investing and technology, including Artificial Intelligence Basics, High-Profit IPO Strategies and All About Short Selling. He is also the author of courses on topics like the Python language and COBOL.