The Bitcoin price is close to $50,000, and in the first quarter of 2021, it will probably reach record highs, but investors should also anticipate fluctuations due to increasing regulatory scrutiny. Nigel Green, CEO, and founder of deVere Group, one of the leading independent financial advisory and financial technology corporations globally, advises this. It emerges after the cryptocurrency struck more than $49,700 on the 14th Feb 2021 for the first time in history.

Mr. Green stated that last week was a significant one for Bitcoin, hitting new all-time highs despite increasing interest from institutional investors. The investment giant Morgan Stanley is considering investing in Bitcoin through its $150 billion investment group. Tesla’s Elon Musk confirmed that it had invested $1.5 billion in the cryptocurrency and prepared to embrace it as payment. BNY Mellon acknowledged that it had established a digital asset unit to develop a crypto asset custody and admin framework; Mastercard said it would offer its merchants the alternative later this year of accepting cryptocurrencies.

Furthermore, Miami affirms that it is considering paying employees and retrieving taxes in cryptocurrency and that the city’s mayor wants to hold Bitcoin in the city’s treasury. This situation is driven by PayPal’s likes last year to enable clients to buy, sell and hold Bitcoin and evaluate Bitcoin and crypto-asset custody as Wall Street titans like Goldman Sachs and JP Morgan issue RFIs (request for information).

Mr. Green further stated that there is a clear travel direction, and institutional investors are taking Bitcoin more seriously as a financial asset and a means of exchange. This factor moves cryptocurrencies into the mainstream financial system more and, consequently, drives the price hike. With increasing institutional demand integrated with ultra-low interest rates, one can anticipate Bitcoin to achieve new highs in the first quarter of 2021, which has already given a 55% return so far year to date after the 300 % gain 2020.

Bitcoin and other cryptocurrencies, like never before, will attract the great attention of regulators, and this can be anticipated to build market volatility. As central banks and governments worldwide rapidly increase their focus on digital currencies, this warning emerges. Treasury Secretary Janet Yellen has suggested the possibility of future cryptocurrency regulation, and as the Securities and Exchange Commission (SEC) could allegedly investigate Elon Musk over the $1.5 billion Bitcoin transaction from Tesla.

Mr. Green concluded by stating that Institutional investors are rapidly appreciating that in this tech-driven, low growth world, ultra-low interest rate and reducing trust in traditional currencies, borderless and digital cryptocurrencies may be becoming a good fit. We can expect the Bitcoin price to increase as a result.  But investors must be aware that regulatory pressures will lead to price instability. 

About deVere Group:

deVere Group is one of the largest advisors of specialist global financial solutions to local, mass affluent, international, and high-net-worth clients.  It has more than 70 offices worldwide, over 80,000 clients, and $12bn under advisement.

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