The digital currency hit a record $ 49,714.66 on Sunday before retreating slightly. Bitcoin continues to rise at around 4% in the last 24 hours.
Investors have sent the price of bitcoin during the pandemic as the Federal Reserve cut interest rates to almost zero in March 2020 (and expects to keep them there for several more years), severely weakening the northern dollar. -American.
This makes bitcoin, by comparison, an attractive currency. There is an established limit on the number of bitcoins on the planet and investors believe that once supply is exhausted, the value of the digital currency can only increase.
As bitcoin rises to all-time highs, big brand investors are stockpiling it and huge consumer companies are embracing it, helping Bitcoin’s growing valuation.
Last week, Tesla said it could soon accept digital currency as payment for its cars. I Tesla, (TSLA) the most valuable car company in the stock market said it kept some of its cash in bitcoin instead of the traditional currency.
On Wednesday, Mastercard announced that it will support the selection of cryptocurrencies directly on its network sometime this year. This represented an important milestone for Bitcoin: Square (SQ) i PayPal (PYPL) it recently began allowing customers to trade bitcoins, but Mastercard will be Bitcoin’s most important platform to date.
This means adding a dose of validity and attractiveness to the cryptocurrency for major investors. For example, a top BlackRock executive said last year that Bitcoin could one day replace gold. And Jay Z and Twitter CEO Jack Dorsey announced Friday that the pair would set up a bitcoin development fund.
Bitcoin topped $ 20,000 for the first time in December and has doubled in value in three months.
Eat for risk
However, the recent rise in cryptocurrencies shows signs of a thaw: an excess of enthusiasm fueled by the fear of getting lost, not just the fundamentals of the market. Take Elon Musk’s sarcastic tweets about Bitcoin rival Bitcoin Dogecoin in recent months: the digital currency, which was built as a parody of cryptocurrency, shot up 50% earlier this month after Musk made a tweet, it only crashed last week.
Anthony Scaramucci, founder of Skybridge Capital, has a large stake in bitcoin and a fund aimed at wealthy investors: the SkyBridge Bitcoin Fund LP. But even he says people need to be vigilant. Last month he told CNN Business it could be a solid addition to the average investor portfolio, but he needs to have a stomach. After all, bitcoin prices crashed below $ 4,000, shortly after reaching a previous high of just under $ 20,000 in December 2017.
“This could be a blast from the top bubble,” Scaramucci told CNN Business in January. “We expect the fund to be volatile and lose money,”
Scaramucci said Bitcoin could suddenly fall from 20% to 50%. But he also highlighted the staying power of Bitcoin over the past decade: if he took $ 1 and put 99 cents in cash and a penny in bitcoin, this investment strategy would have surpassed the $ 1 invested in the S&P 500 during the last ten years. , he pointed out.
“The most likely trajectory is that people can make a monumental amount of money. Bitcoin is not free from Federal Reserve policy problems or gold supply,” he said. “Now there is more demand for bitcoins than supply. The price should go up.”
Paul R. CNN Business’s Monica contributed to this report.
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