Bitcoin tops $ 50,000 for the first time as large companies switch to crypto
Bitcoin price surpassed $ 50,000 for the first time in history, continuing its rapid rally as large companies seem to favor cryptocurrencies. According to Coin Metrics, the world’s largest digital currency by market value rose more than 3% to a record $ 50,487 at about 7:30 am ET. It later fell below the mark, climbing 0.2% at $ 48,760.
Bitcoin has gained support thanks to news that major firms like Tesla and Mastercard are showing support for crypto. Tesla announced last week that it bought $ 1.5 billion worth of bitcoins and plans to accept digitalcoin as payment for its products, while Mastercard said it will open its network to select digital currencies. PayPal and BNY Mellon have also taken big steps to support cryptocurrency.
Tesla’s use of corporate money to buy bitcoin has sparked speculation over whether other big companies will follow suit. Uber CEO Dara Khosrowshahi told CNBC last week that the company had discussed but swiftly rejected the idea of buying bitcoins, but is considering whether to accept cryptocurrencies as payment.
These events have led many crypto investors to believe that the latest bull race is different from past rallies. Bitcoin skyrocketed to nearly $ 20,000 at the end of 2017 and lost more than 80% of its value the following year. Bitcoin backers say that while the 2017 bubble was fueled by retail speculation, the current cycle is fueled by demand from institutional investors.
I think bitcoin is a much more stable asset class today than it was three years ago, Michael Saylor, CEO of enterprise software company MicroStrategy, told CNBCs Asia Street Signs program Tuesday. It used to be dominated by leveraged retail traders in international high-leverage markets. MicroStrategy and Jack Dorsey’s fintech company Square made headlines last year after using an unusual strategy of using corporate money to buy bitcoin.
I think since March 2020, you have noticed that institutions have started to arrive, and I think that this trend will continue in 2021, Sailor added. There are enthusiasts for using bitcoin as a medium of exchange, but I personally believe a compelling use case is a store of value.
MicroStrategy’s share price has risen more than sevenfold since the first bitcoin purchase in August. The company announced on Tuesday that it will offer $ 600 million in convertible bonds to buy more bitcoins. It has been speculated that MicroStrategy proposed a plan to buy Tesla’s bitcoins after Sailor and Elon Musk exchanged messages on Twitter about large transactions with cryptocurrency.
However, skeptics view Bitcoin as a speculative asset and fear it could be one of the largest market bubbles in history. Economists like Nouriel Roubini say bitcoin and other cryptocurrencies have no intrinsic value. And a recent survey by Deutsche Bank found that investors view Bitcoin as the biggest bubble in financial markets.