Bitcoin’s value broke above $50,000 for the first time in history Tuesday, continuing its blistering rally as major companies turn up to be warming to cryptocurrencies.
The world’s largest digital currency by market value rose more than 3% to an all-time maximum of $50,487 at about 7:30 a.m. ET, according to data from Coin Metrics. It later fell below the mark, vocation 0.2% higher at a price of $48,760.
Bitcoin has gotten a boost from news of large firms like Tesla and Mastercard pose support for crypto. Tesla last week revealed it had bought $1.5 billion worth of bitcoin and plans to agree to the digital coin as payment for its products, while Mastercard said it will open up its network to some digital currencies. PayPal and BNY Mellon clothed also made big moves to support crypto.
Tesla’s use of corporate cash to buy bitcoin sparked speculation over whether other chief companies would follow suit. Uber CEO Dara Khosrowshahi told CNBC last week that the suite had discussed but “quickly dismissed” the idea of buying bitcoin but is considering whether to accept cryptocurrencies as payment.
These growths have led many crypto investors to believe the latest bull run is different than past rallies. Bitcoin skyrocketed to all but $20,000 in late 2017 before losing more than 80% of its value the following year. Bitcoin believers say that, whereas the 2017 boil was driven by retail speculation, the current cycle is being fueled by demand from institutional investors.
“I think bitcoin is a much assorted stable asset class today than it was three years ago,” Michael Saylor, CEO of enterprise software firm MicroStrategy, reported CNBC’s “Street Signs Asia” program on Tuesday. “It used to be dominated by leveraged retail traders … on international sells with a lot of leverage.”
MicroStrategy and Jack Dorsey’s fintech firm Square hit the headlines last year after prepossessing the unusual strategy of using corporate cash to purchase bitcoin.
“I think that starting in March of 2020, you saw foundings start to arrive, and I think in 2021 you’re going to see that trend continue,” Saylor added. “There’re enthusiasts for bitcoin as a instrumentality of exchange, … but I personally believe that the compelling use case is a store of value.”
MicroStrategy has seen its share consequence climb more than sevenfold since it first bought bitcoin in August. The company announced Tuesday that it whim offer $600 million in convertible bonds to buy more bitcoin. There has been speculation that MicroStrategy proffered a blueprint for Tesla’s bitcoin purchase after an exchange between Saylor and Elon Musk on Twitter about making “good transactions” with the cryptocurrency.
Still, skeptics see bitcoin as a speculative asset and worry it may be one of the biggest market bubbles in telling. Economists like Nouriel Roubini say that bitcoin and other cryptocurrencies have no intrinsic value. And a recent Deutsche Bank examine said investors view bitcoin as the most extreme bubble in financial markets.