Bitcoin surpasses $50,000 for first time ever
Bitcoin’s price broke above $50,000 for the first time in history Tuesday, continuing its blistering rally as major companies appear to be warming to cryptocurrencies.
The world’s largest digital currency by market valuable rose more than 3% to an all-time high of $50,389 at 07:32 a.m. ET, according to data from Coin Metrics.
Bitcoin has gotten a boost from news of large firms like Tesla, Mastercard and BNY Mellon warming to cryptocurrencies. Tesla last revealed it had bought $1.5 billion worth of bitcoin and plans to accept the digital coin as payment for its products, while Mastercard said it would open up its network to some digital currencies. PayPal and BNY Mellon have also made big moves to support crypto.
Tesla’s use of corporate cash to buy bitcoin sparked speculation over whether other major companies would follow suit, CNBC reported.
These developments have led some crypto investors to believe the latest bull run is different to rallies past. Bitcoin skyrocketed to nearly $20,000 in late 2017 before losing more than 80% of its value the following year. Bitcoin believers say that, whereas the 2017 bubble was driven by retail speculation, the current cycle is being fueled by demand from institutional investors.
MicroStrategy has seen its share price climb more than sevenfold since it first bought bitcoin in August. The company announced Tuesday that it would offer $600 million in convertible bonds to buy more bitcoin. There has been speculation that MicroStrategy offered a blueprint for Tesla’s bitcoin purchase after an exchange between Saylor and Elon Musk on Twitter about making “large transactions” with the cryptocurrency.
Still, skeptics see bitcoin as a speculative asset and worry it may be one of the biggest market bubbles in history. Economists like Nouriel Roubini say that bitcoin and other cryptocurrencies have no intrinsic value. And a recent Deutsche Bank survey said investors view bitcoin as the most extreme bubble in financial markets.