Bitcoin has reached its highest level of mainstream acceptance over the last year or so, as it's price skyrocketed to all time highs. However more recently, a substantial development occurred as El Salvador elected to recognise Bitcoin as a legitimate currency and tender, which was the cryptocurrency's original purpose.
Similar sentiment was shared by Nigel Green, the chief executive and founder of deVere Group, who had the following to say: "El Salvador has become the first country to adopt Bitcoin as official legal tender – but it will not be the last.
“Some larger, more powerful countries are trying to quash or slow the inevitable shift to borderless, global, digital currencies.
“But this small Central American nation has embraced the biggest one of them all – Bitcoin – and recognised it as official legal tender. El Salvador has made history and become a true pioneer of the digital age.
“Where El Salvador has led, we can expect other developing countries to follow.
“This is because low-income countries have long suffered because their currencies are weak and extremely vulnerable to market changes and that triggers rampant inflation.
“This is why most developing countries become reliant upon major ‘first-world’ currencies, such as the U.S. dollar, to complete transactions.
“But reliance on another country’s currency also comes with its own set of, often very costly, problems.”
When questioned on the likelihood of the UK Government following suit, Nigel expressed doubt but he acknowledged the British financial establishment is well aware of the digital scene.
Nigel concluded: "The UK having Bitcoin as an official currency, like the pound, any time soon is unlikely.
"But in April, Chancellor Rishi Sunak asked the Bank of England to look at the possibility for a 'Britcoin', or central bank-backed digital currency, due to the pressure and challenges being imposed by cryptocurrencies such as Bitcoin.
"Despite the resistance of some officials, in the world of business and commerce there is going to be an inevitable shift towards borderless, global and digital currencies in the UK as the world becomes increasingly globalised and digitalised. It makes sense. Cryptocurrencies – in some form or another - are widely regarded as the future of money.
"Indeed, digital currencies have already changed forever the way the world handles money, makes transactions, does business, and manages assets.
"They are becoming an integrated part of the mainstream financial system, which is evidenced by more and more financial giants, social media platforms and multinationals, amongst others, becoming increasingly actively pro-crypto."
Evidence for this integration can be evidenced through recent analysis from Nickel Digital Asset Management, which showed £43.2billion worth of Bitcoin is held through a number of economic behemoths who hold sway in the financial world.
The company's findings detailed 19 listed companies with a market cap of over $1trillion have around $6.5 billion invested in Bitcoin and on top of this:
- Seven companies made their Bitcoin purchases in 2020, as many as eight new entrants, including Tesla, have allocated to Bitcoin in just the first four months of 2021
- There is a notable US and Canadian bias in these allocations. Of the 19 listed enterprises reviewed, 13 are US and Canadian companies, three are European, one is Turkish, one is from Hong Kong and one is Australian.
- A further 17 listed companies have purchased Bitcoin, without revealing the full details of their portfolio composition at this stage.
- $43.2 billion worth of Bitcoin is held through various Bitcoin closed-ended trusts and exchange traded products. These investment funds hold these allocations on behalf of their clients, including a range of retail investors, asset managers, and - increasingly - institutional asset allocators.
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