- Bitcoin crossed the $50k mark and set the new record high
- The rally intensified after MicroStrategy announced plans to invest another $600 million
- Companies like Tesla, BNY Mellon, and Mastercard showed their support for digital currencies
Bitcoin hit a new milestone today. The world’s leading cryptocurrency surpassed the $50k level for the first time in history and set the new all-time high of $51,615.93, according to the data of CoinGecko.
MicroStrategy stepped into again
The bitcoin’s price jumped yesterday just after MicroStrategy announced it is selling convertible debt to acquire more bitcoin. The company already owns 72,000 BTC as of the first days of February. It now plans to acquire additional some for nearly $600 million.
MicroStragey’s CEO Michael Saylor is one of the biggest bitcoin advocates in the crypto space. He strongly supports bitcoin as a hedge against the US dollar inflation and claims bitcoin to be one of the best investment options to protect the purchasing power.
New wave of investors
Bitcoin’s recent rally is mainly fueled by the support from giant brands. Last week Tesla announced the $1.5 billion investments in Bitcoin. The company also revealed its plans to make cryptocurrencies an optional payment method in the future.
The oldest custodian bank in the United States BNY Mellon stated it starts integrating digital currency services for its clients. The Mayor of Miami is working on a resolution that would bring bitcoin to the city’s balance sheet.
Twitter considers adding Bitcoin to its balance sheet and even using it to pay for the employees if they’ll ask. Uber plans to add bitcoin as payment as well. Earlier this year BlackRock, the world’s biggest asset manager, added bitcoin futures as an investment to two of its funds.
Financial giant MasterCard announced its support for digital currencies, although it is not clear yet if it would be bitcoin. PayPal and Square stepped into the cryptocurrency market last year, providing millions of users with the ability to buy and trade digital assets.
On the flipside
- Bitcoin’s volatility remains the biggest issue to become a mainstream means of payment.
- A Deutsche Bank survey earlier revealed bitcoin could be in bubble territory.
- Nouriel Roubini believes that Bitcoin and other cryptocurrencies have no intrinsic value and as such cannot stand the test of time.
- MasterCard said to apply strict criteria for digital coins, stability, compliance with KYC, and local laws to be one of them.
Different from 2017 rally
Bitcoin made an incredible growth of over 1170% since the mid-March crash last year when its price even dropped below $4k. 2020 will be written in the history of bitcoin as a year of bitcoin’s initialization.
The bulls are massively driving the market, but unlike in the previous BTC boom of 2017, the market makers are different now.
In late 2017 the bitcoin rally was mainly driven by retail investors and speculation. Bitcoin’s value soared to almost $20,000 before plummeting to around $7,000, effectively losing about 80% of its value.
This time the demand comes from institutional players. Big investors choose bitcoin as a hedge against fiat currency inflation and establish bitcoin’s status as a store of value.