What’s driving the Bitcoin price back towards new record highs?

The Bitcoin (CRYPTO: BTC) price has been on a tear again over the past week.

At the current price of US$58,965 (AU$77,586), Bitcoin has gained 16% since this time last week. Not bad for the world’s largest crypto, which has again broken through the US$1 trillion market cap to reach US$1.1 trillion at the time of writing.

And it puts Bitcoin back within 4% of its all-time high of US$61,557, hit on 14 March this year.

Although this past week’s bullish run won’t end the ‘Bitcoin bubble’ debate, it certainly adds fresh ammo for the Bitcoin bull camp, who argue this is only the beginning.

What’s helping drive the Bitcoin price back to new record highs?

There are all manner of forces at work on the Bitcoin price. Some pulling it lower, many pushing it higher.

For the purposes of this article, we’ll narrow the focus to 2 big announcements that have supported Bitcoin this week.

On Monday, Visa Inc (NYSE: V) announced a trial program that will see the global payments giant accept USD Coin, a so-called stablecoin, for payments. Unlike many cryptocurrencies, like Bitcoin, which see major price fluctuations, stablecoins are pegged to certain assets or fiat currencies. In this case, the US dollar.

As Bloomberg reports, “As part of a pilot program, Visa is using USD Coin to settle transactions over Ethereum, with the help of the Crypto.com platform and Anchorage, a digital-asset bank…”

Bitcoin gained more than 6% on the day of the announcement.

Commenting on the pilot program, Visa’s chief product officer Jack Forestell said:

Crypto-native fintechs want partners who understand their business and the complexities of digital currency.

The announcement today marks a major milestone in our ability to address the needs of fintechs.

What else helped spur Bitcoin this week?

You may be familiar with a little firm called Goldman Sachs (NYSE: GS).

Yesterday, overnight Aussie time, the global wealth manager revealed it is preparing to offer investment vehicles for Bitcoin to clients of its private wealth management sector. Expectations are that it will commence in the second quarter of 2021.

Mary Rich is the global head of digital assets at Goldman Sachs. In an interview with CNBC, she said:

We are working closely with teams across the firm to explore ways to offer thoughtful and appropriate access to the ecosystem for private wealth clients, and that is something we expect to offer in the near-term.

Rich added:

There’s a contingent of clients who are looking to this asset as a hedge against inflation, and the macro backdrop over the past year has certainly played into that. There are also a large contingent of clients who feel like we’re sitting at the dawn of a new Internet in some ways and are looking for ways to participate in this space.

If Bitcoin indeed does mirror the dawn of a new internet, then Bitcoin’s record price on 14 March may soon be broken once again.

More reading

• Goldman Sachs plans to let wealthy clients invest in Bitcoin
• ASX 200 Weekly Wrap: ASX 200 gets its mojo back
• Did the Bitcoin (CRYPTO:BTC) price fly too high too fast?
• At today’s Bitcoin price that’ll be 2 Bitcoin for a Tesla Model S
• 3 ways to help protect your ASX share portfolio against inflation

Bernd Struben has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and recommends Bitcoin and Visa. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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