Jack Dorsey and Jay Z announce bitcoin fund as cryptocurrency goes mainstream

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Dorsey tweeted the news Friday, writing that they are accepting applications for a “blind irrevocable trust” targeting Africa and India. He promises that the fund will have “zero direction” from himself and Jay Z and that the partners are looking for three board members. Dorsey and Jay Z are investing 500 bitcoins in the project, currently worth about $ 23 million.
Bitcoin is already in Dorsey’s wallet. His other company, Square, bought 4,709 bitcoins in October 2020, equaling $ 50 million at the time. In 2018, the company expanded its mobile payment service Cash App to support bitcoin trading, even for users without a bank account. And in 2019, it launched Square Crypto, which awards exchanges to bitcoin developers and designers.
Also this week, a Twitter manager said in an interview that the company is reviewing other new uses of the digital currency, including employee compensation.

Tesla’s big gamble

The most valuable car company on the stock exchange, Tesla TSLA, announced on Monday that it is holding some of its cash in bitcoin rather than traditional currency and may soon be accepting the cryptocurrency as payment for its cars.

In its annual filing with the Securities and Exchange Commission, Tesla said it expects to “begin accepting bitcoin as a form of payment for our products in the near future … which we may or may not liquidate upon receipt.”

That news followed the revelation that the automaker is holding $ 1.5 billion worth of bitcoin on its balance sheet as part of a move to “ be part of [the company’s] cash in certain specified alternative reserves. Tesla put $ 19 billion in cash and cash equivalents on its balance sheet as of December 31.

Tesla CEO Elon Musk has been taking an interest in bitcoin and other cryptocurrencies lately. In a December 20 tweet, he said that “Bitcoin is almost as BS as fiat money,” suggesting his belief that it may be less “BS” than traditional government-backed currencies.

Mastercard jumps in

The credit card company is bringing bitcoin to the till and announcing Wednesday that it will support “select cryptocurrencies” directly on its network later this year.
although MasterCard MA was lacking in details, the company said the process could work something like this: When a customer wants to purchase an item with bitcoin, Mastercard’s crypto partners will convert the digital currency into traditional currency and send the money across Mastercard’s network.

This change “will allow many more traders to accept crypto” and “remove inefficiencies, avoiding both consumers and traders having to switch back and forth between crypto and traditional. [currency] to make purchases, ”said Mastercard.

Bitcoin comes to America’s oldest bank

BNY Mellon – America’s oldest bank – dating back to when Alexander Hamilton founded the Bank of New York in 1784 – announced Thursday that it has formed a “digital assets” unit. It will start helping clients fulfill needs for the growth of digital assets, including cryptocurrencies, at an unspecified date later this year.

Customer demand and clearer regulations “provide us with a great opportunity to expand our current service offering into this emerging area,” said Roman Regelman, CEO of Asset Servicing at Mellon.

Bitcoin becomes an “alternative asset”

After news of Tesla’s major investment, the cryptocurrency saw confidence increase.

“As more and more companies start to accept bitcoin, this will only lead to a further increase in demand in a market with limited supply,” Fawad Razaqzada, analyst at ThinkMarkets, wrote in a note to customers.

“Bitcoin will be an alternative asset,” said Brad Bechtel, global head of FX at Jefferies. “It’s not correlated with anything else in the market.” And that makes it an attractive asset to add to a portfolio, he added.

That’s pretty optimistic for bitcoin’s long-term outlook, even as some, notably Bank of America, have called the crypto rally “the mother of all bubbles.”

–CNN Business’ Anneken Tappe and Chris Isidore contributed to this report.

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