Bitcoin’s price jumped above $50,000 for the first time in history on Tuesday. The most popular digital coin continues its blistering rally as major companies seem more interested in dealing with cryptocurrencies.
Bitcoin is also the largest digital currency by market value worldwide. It skyrocketed by more than 3%, hitting an all-time high of $50,487. However, the crypto fell below the mark later. Still, it managed to gain 0.2%, reaching a price of $48,760 after a short dip.
Several large firms, such as Tesla and Mastercard, recently showed support for crypto. Tesla last week announced that it had purchased $1.5 billion worth of bitcoin. Furthermore, the company plans to accept the digital coin as payment for its products. Meanwhile, Mastercard stated that it would open up its network to some digital currencies. BNY Mellon and PayPal have also made moves to support cryptocurrency.
Will the other companies follow suit?
Tesla has used corporate cash to buy Bitcoin, sparking speculation over whether other major companies would do the same. Uber had discussed the possibility but quickly dismissed the idea of buying Bitcoin. However, the company is considering whether to accept cryptocurrencies as payment – noted Uber CEO Dara Khosrowshahi last week.
While some bitcoin surges were precipitated without a strong foundation, many crypto traders believe the latest bull run differs from past rallies thanks to these recent developments. Bitcoin soared to almost $20,000 in late 2017 before plummeting down by more than 80% of its value the following year. Still, some investors are fast to point out that, whereas the 2017 rally was driven by retail speculation, demand from institutional investors fuels the current one.
Michael Saylor, the CEO of enterprise software firm MicroStrategy, thinks that bitcoin is a much more stable asset class presently than it was three years ago. He also added that leveraged retail traders used to dominate the crypto on international markets with a lot of leverage.
Last year, Jack Dorsey’s fintech firm Square and MicroStrategy hit the headlines after using corporate cash to purchase bitcoin.
According to Saylor, from March of 2020, institutions started to employ this new strategy. And he thinks that in 2021 we are going to see that trend continue. There’re many enthusiasts for bitcoin as a medium of exchange.
MicroStrategy’s share price increased by more than sevenfold since it first bought bitcoin in August. On Tuesday, the company announced that it plans to offer $600 million in convertible bonds to buy more cryptocurrency. Some even speculate that MicroStrategy offered a blueprint for Tesla’s bitcoin purchase after Elon Musk and Saylor’s exchange on Twitter. They spoke about making large transactions with cryptocurrency.