In this photo illustration, a visual representation of the digital cryptocurrency, Bitcoin is exposed in front of the Bitcoin exchange rate chart on February 9, 2021 in Paris, France.
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The price of Bitcoin exceeded more than $ 50,000 for the first time in history on Tuesday, continuing its lightning rally, as major companies seem to be heating up on cryptocurrencies.
The largest digital currency in the world, in market value, grew by more than 3%, to an all-time high of $ 50,389 at 07:32 am ET, according to Coin Metrics data.
Bitcoin has gained momentum from the news of big companies like Tesla, Mastercard and BNY Mellon that are heating up on cryptocurrencies. Tesla has recently revealed that it has bought $ 1.5 billion worth of bitcoin and intends to accept digital currency as payment for its products, while Mastercard has said it will open 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 has sparked speculation about whether other major companies would follow suit. Uber CEO Dara Khosrowshahi told CNBC last week that the company had discussed, but quickly “rejected” the idea of buying bitcoin. However, the company is considering whether to accept cryptocurrencies as payment.
These developments have led some crypto investors to believe that the last bullfight is different from past rallies. Bitcoin rose to nearly $ 20,000 at the end of 2017, before losing more than 80% of its value the following year. Bitcoin believers say that while the 2017 bubble was driven by retail speculation, the current cycle is fueled by institutional investor demand.
“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 CNBC’s “Street Signs Asia” program on Tuesday. “It used to be dominated by leveraged retailers … in influential international markets.”
MicroStrategy and Jack Dorsey Square’s fintech company came to the fore last year after adopting the unusual strategy of using corporate cash to buy bitcoin.
“I think that, starting in March 2020, you have seen the institutions start to arrive and I think that in 2021 you will see that the trend continues,” Saylor added. “There are enthusiasts for bitcoin as a medium of exchange … but I personally think the compelling use case is a store of value.”
MicroStrategy has seen its share price rise more than sevenfold since it first bought bitcoin in August. The company announced on Tuesday that it will offer $ 600 million in convertible bonds to buy more bitcoin. It has been speculated that MicroStrategy has offered a plan for the acquisition of bitcoin by Tesla after an exchange between Saylor and Elon Musk on Twitter about conducting “large transactions” with cryptocurrency.
However, skeptics see bitcoin as a speculative asset and worry that it could 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 survey by Deutsche Bank said that investors consider bitcoin to be the most extreme bubble in the financial markets.