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


Dorsey tweeted the news on Friday, writing that they are taking requests for a “blind irrevocable trust” centered on Africa and India. He promises that the fund will have a “zero direction” from him and Jay Z and that the partners will look for three board members. Dorsey and Jay Z are investing 500 Bitcoin in the project, which is currently valued at around $ 23 million. Bitcoin is already in Dorsey’s portfolio. His other company, Square, bought 4,709 bitcoins in October 2020, which was the equivalent of $ 50 million at the time. In 2018, the company expanded its Cash App mobile payment service to support Bitcoin trading even for users without a bank account. And in 2019, Square Crypto was launched, which gives grants to Bitcoin developers and designers. Also this week, a Twitter manager said in an interview that the company was exploring other new uses for the digital currency, including paying employees.

Tesla’s big bet

The most valuable automotive 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 accept the cryptocurrency as a means of payment for its cars.

In its annual filing with the Securities and Exchange Commission, Tesla said it expects to “accept bitcoin as 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 has $ 1.5 billion in Bitcoin on its balance sheet to “invest some of it” [the company’s] Cash in certain designated alternative reserves. “Tesla had cash and cash equivalents of $ 19 billion on December 31st.

Elon Musk, CEO of Tesla, recently signaled an interest in Bitcoin and other cryptocurrencies. In a tweet on Dec. 20, he said that “Bitcoin is almost as bs as fiat money,” suggesting that it may be less “bs” than traditional government-backed currencies.

Mastercard steps in

The credit card company is bringing Bitcoin to the register and on Wednesday announced that it will support “selected cryptocurrencies” directly on its network later this year MasterCard ((MA) The company said the process could work something like this: when a customer wants to buy an item using Bitcoin, Mastercard’s crypto partners convert the digital currency to traditional currency and transfer the money over Mastercard’s network.

This change “allows many more merchants to accept crypto” as well as “avoids inefficiencies so that both consumers and merchants must avoid switching 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 the founding of the Bank of New York by Alexander Hamilton in 1784 – announced Thursday that it is forming a “digital assets” unit. It will help customers, at an unspecified time later this year, meet the needs related to the growth of digital assets, including cryptocurrencies.

Customer demand and clearer regulation “offer us a tremendous opportunity to expand our current service offering into this emerging area,” said Roman Regelman, Mellon’s CEO for Asset Service.

Bitcoin becomes an “alternative asset”

After the news of Tesla’s big investment, the cryptocurrency saw a confidence surge.

“As more and more companies accept Bitcoin, it will only lead to a further increase in demand in a market with limited supply,” Fawad Razaqzada, an analyst at ThinkMarkets, wrote in a message to customers.

“Bitcoin is becoming an alternative asset,” said Brad Bechtel, global FX director at Jefferies. “It is not correlated with anything else on the market.” And that makes it an attractive asset to add to a portfolio, he added.

That’s pretty bullish on the long-term outlook for Bitcoin, even though some, particularly Bank of America, have called the crypto rally the “mother of all bubbles”.

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