On Tuesday, almost a decade after the world’s oldest cryptocurrency hit the $1 mark on 9 February 2011, Bitcoin prices topped the $50,000 level for the first time. On the back of sustained interest from some of the major global institutions, the recent leg of the rally has come. Bitcoin has recently been adopted into its ecosystem by companies such as Tesla, MasterCard, PayPal, MicroStrategy, and Apple.
Before paring some of the gains to trade at $49,425.17, the digital currency hit a lifetime high of $50,350.06, up 3.60 percent at around 8.50 pm IST, as per data available with the CoinGecko cryptocurrency tracker. In rupee terms, on crypto-exchange WazirX, surpassed the ⁇ 37 lakh level.
Bitcoin commanded a $938 billion market capitalization at its peak level, making it more valuable than Tesla and Facebook. By contrast, Apple, the world’s largest company, has a market valuation of more than $2.20 trillion, followed by Saudi Aramco ($2.03 trillion), Microsoft ($1.80 trillion), and Amazon ($1.60 trillion).
The price movement of bitcoin is fuelled by demand from retail as well as institutional investors, according to industry experts.
“We’ll see 60, 70, and $100,000 in the near future. Bitcoin is an inflation-proof store of value that is resistant to corruption, supported by more reliable and transparent accounting. Bitcoin isn’t a bubble, it’s now a part of our economy,’ said ZebPay Chief Marketing Officer Vikram Rangala.
By crossing the $24,000 mark in December, bitcoin had touched an all-time high and by the beginning of 2021, it had jumped to the $40,000 level, putting its year-to-date (YTD) return at nearly 70 percent.
Over the past few weeks, the nature of the demand for bitcoin has changed. It was previously considered a hedge and a diversification tool for the portfolio, while it has recently made inroads into traditional finance.
We are witnessing a continuous increase in demand with major institutions such as Tesla, MasterCard, PayPal, and MicroStrategy introducing bitcoin into their ecosystem, thus pushing the valuation higher. With the introduction of newer products built around bitcoin, we expect the trend to continue in the form of investments in these digital assets,” said Sumit Gupta, CEO, and co-founder of CoinDCX.
In the day after the US electric car manufacturer Tesla revealed a $1.5 billion holding in bitcoin, prices rose by around 18 percent last week, making it by far the largest company yet to back the cryptocurrency.
As Tesla’s news of buying $1.5 billion worth of bitcoin came out, price growth had begun to gain momentum. The continuous price growth of Bitcoin is a testament to the fact that it is now seen by more and more institutions as digital gold and as a hedge against market volatility,” said WazirX CEO Nischal Shetty.”