The price of Bitcoin has broken the record yet again by moving above $50,000 for the first time in history.
On Tuesday, as it continues its blistering rally as a major cryptocurrency, bitcoin appears to be moving faster than other cryptocurrencies.
The world’s biggest and most popular digital currency, by its market value, rose to an all-time high of $50,487 around 7:30 a.m. Eastern Time (ET). Source: CoinMetrics
It later went down below the mark, trading at a 0.6% higher price of $48,952.
Bitcoin has been given a boost from the news by large firms like Teslas and tech influencers like Tesla’s founder, Elon Musk.
Mastercard has equally shown support to the crypto wake by readying itself to accept cryptocurrency.
Last week Tesla announced that it had bought $1.5 billion worth of bitcoin and intended to accept the digital coin(bitcoin) as a means of payment for its products.
This action’s implication can be summarized as this; Tesla increases in valuation by buying bitcoin more than by selling its electric cars.
Big Tech Firms Ready to Start Accepting Cryptocurrencies
While PayPal and BNY Mellon have made big moves to support cryptocurrency transactions, Tesla, as one of the global tech giants, sparked speculation over its use of corporate cash to purchase bitcoin.
There is a certain palpable tension in the air as the Economy looks to see if other major companies would follow Tesla in a bid to accept the use of cryptocurrencies.
CEO of Uber, Dara Khosrowshahi, also told CNBC
last week that the company had discussed payment diversification but quickly dismissed the idea of following Tesla’s move of buying bitcoin.
However, he did leave a hint that Uber is considering whether to accept cryptocurrencies as means of payment or not.
These recent developments have led many crypto enthusiasts and investors to believe the latest bull run is different from bitcoin’s past rallies.
When Bitcoin skyrocketed to nearly $20,000 in late 2017 before it massively lost more than 80% of its value the following year, it made businesses lose interest in investing in bitcoin.
Bitcoin adopters believe that the 2017 bubble was moved by retail speculation, and the current cycle of this cryptocurrency is being fueled by demand different from the institutional investor’s interest.
CEO of enterprise software firm MicroStrategy, Michael Saylor, told CNBC’s “Street Signs Asia” program on Tuesday “I think bitcoin is a much more stable asset class today than it was three years ago.”
He continued by saying, “It used to be dominated by leveraged retail traders on the international markets with a lot of leverage,” implying that a lot has changed in the adoption and use of bitcoin in the past three years.
Corporate Cash For Bitcoin Purchase
MicroStrategy and Jack Dorsey’s fintech firm Square made the headlines after they announced in 2020 that they were taking the unexpected strategy of using corporate cash to purchase bitcoin. The saylor’s statement below gives a concrete reason why.
Saylor said, “I think that starting in March of 2020, you saw institutions start to arrive, and I think in 2021 you are going to see that trend continue,” he also added that “Microstrategy has begun gladly accepting bitcoin as a medium of exchange, but I personally believe that the main use case is a store of value.”
MicroStrategy has witnessed its share price pump more than 7 fold since it first purchased bitcoin in August.
On Tuesday, MicroStrategy announced that it would be willing to offer $600 million in convertible bonds to purchase more bitcoin for the company.
Arguably, there are speculations that MicroStrategy offered a purview for Tesla’s bitcoin buy after an exchange that occurred between Saylor and Elon Musk on Twitter about making “big transactions” using cryptocurrency.
Although skeptics look at bitcoin as a speculative asset and worry that bitcoin may be one of the biggest market booms in history, Economists like Nouriel Roubini suggested that bitcoin and other cryptocurrencies have no intrinsic value.
And a recent Deutsche Bank survey added that investors look at bitcoin as just one of the most extreme sparks in the financial market, expecting it to run its course and fizzle out in time.
A larger part of the population does not see thins in the same light and has continued to buy and hold bitcoin with great enthusiasm.
This is the first time bitcoin has recorded a shattering 2021 rally extending to 74% amid Wall Street adoption.
Bitcoin price has risen to a record of $49,998 on the Binance exchange platform as interest from various firms like JPMorgan and BNY Mellon encouraged the rally.
The price of bitcoin rose as much as 4.9% on Tuesday, to an amazing worth of $50,547.70, a very record high.
Big Firms On The Bitcoin Price Move
The price jump has increased interest from major institutional investors is consistently adding legitimacy and confidence to the rally on bitcoin.
BNY Mellon is already creating a crypto unit, while Morgan Stanley, on the other hand, is reportedly weighing investing in cryptocurrencies.
On Tuesday, the worth of bitcoin jumped above $50,000 for the first time since its emergence, making its year gain to 74%.
Wall Street Institution’s recent interest has immensely contributed to the pump.
Elon Musk’s Tesla hype on Twitter also triggered the recent climb.
Neil Wilson, the chief market analyst at the trading platform Markets.com, referring to that year’s volatility on bitcoin, said, “Growing corporate support for the crypto by large institutional firms makes this a different marketplace to what it used to be in 2017”.
On Thursday last week, a Wall Street Journal also reports that BNY Mellon has planned to issue, hold, and transfer clients’ bitcoin.
This would be the first global bank in the world to provide an integrated digital asset service to its customers’ benefit, which may lead other financial institutions to take some steps.
As stated earlier, Mastercard reported on Wednesday that it would start allowing its customers to make use of “select cryptocurrencies” on its network later in the year.
This is truly a big move!
Bloomberg also reported last week Saturday that a $150 billion worth of investment arm belonging to Morgan Stanley was thinking of betting on bitcoin. Morgan Stanley actually declined to comment.
JPMorgan Copresident Daniel Pinto, in an interview session, told CNBC on Friday that he was more convinced than ever before that more banks would get involved in cryptocurrencies thanks to client demand.
Pinto also added that “The demand is not there yet, but I am sure it will be at some point.”
Interest from big players in the market space has given their support to the narrative that institutional investors increase their full interest in bitcoin.
This has been a key determinant of the massive rally in bitcoin’s price, which moved from below $4,000 last March to $50,000 on Tuesday.
Bitcoin Jump Boosts Other Currencies
Bitcoin has also boosted other cryptocurrencies, such as Ether, the coin on the Ethereum network.
Ether’s price was roughly flat on Tuesday, at the price of $1,793, after it hit a record above $1,870 over the weekend.
Craig Erlam, who is a senior market analyst at the currency platform Oanda, said, “It’s been a fantastic couple of weeks for the cryptocurrency market space, with numerous big names making bitcoin-related announcements.”
He added that the answer to the question of “how much further it can go and how fast?” was simple, adding that bitcoin will continue to rise as more international firms are now turning their attention towards cryptocurrencies.
Are you excited about the price increase? What do you think?
Let us know in the comments.