TOKYO, Feb. 9 (Reuters) – Bitcoin extended its earnings on Tuesday to a record high, as Tesla Inc.’s investment in cryptocurrency led investors to consider it becoming a common asset class for both companies and money managers.
Bitcoin has doubled in more than two months as institutional investors look for alternative wealth stores and retailers are on the rise. Monday’s jump after the Tesla announcement was the biggest daily increase in three years.
It traded at a record high of $ 48,216 on Tuesday. The ethereum of rival cryptocurrencies hit a record $ 1,784.85 early this morning.
The shares of companies that provide trading platforms for bitcoin and cryptocurrency “extraction” technology have increased in China, South Korea and Australia, and so have large computer chip companies such as SK Hynix.
The US dollar fell against most currencies.
Analysts believe that Tesla’s announcement bought $ 1.5 billion in bitcoin and that it will take cryptocurrency, because car payments are part of a bigger change, as companies and large investment houses target small traders.
“Although you can buy a Tesla with bitcoin now, I wouldn’t suggest you do it,” said Michael Bucella, a partner at CNBC’s cryptocurrency investment firm BlockTower. “We are in a position where these are the first stages of an allocation to bitcoin from the institutional and corporate community.”
Bitcoin has already risen 62% this year, in addition to a 300% rally last year, while investors are looking for alternatives to the green currency because of 0% interest rates in the US Federal Reserve.
Central bankers and regulators, especially in China, are also beginning to adopt their own digital currencies for everyday use, in a major break from the conventional operation of global finance.
“Digital currencies, it seems clear, will be a growing part of the financial architecture and with the potential for portfolios to move forward,” said Ben Powell, APAC’s chief investment strategist at CNR’s BlackRock Investment Institute. .
“There is not only news in the US about the bitcoin situation, but in China we have a launch of China’s digital currency with the so-called ‘red packages’.”
The head of Tesla, Elon Musk, has long been a fan of cryptocurrencies – he spoke to them online – but Tesla’s investment in foreign currency was a surprise that put a rocket under this sector.
Even the dogecoin, a cryptocurrency joke with a dog as a symbol, saw its turbo-powered value after Musk mentioned it on Twitter. It grew 13% in the last day, according to CoinMarketCap.
China Feitian Technologies Co. Ltd, which produces technology for digital payments, rose 4.47% on Tuesday.
Beijing will issue residents a 10 million yuan ($ 1.55 million) digital currency that can be used during the Chinese New Year holiday starting Thursday, local media reported.
In addition, the Chinese are expected to send billions of yuan to each other during the week-long vacation through chat applications such as WeChat – digital versions of traditional “red package” envelopes full of cash. ($ 1 = 6,4493 Chinese renminbi yuan) (Written by Stanley White)