Bitcoin rally breaks above $50,000 for the first time ever
Bitcoin rose above $50,000 on Tuesday (February 16) to a new record high, building on a rally fuelled by signs that the world’s biggest cryptocurrency is gaining acceptance amongst mainstream investors.
The world’s largest cryptocurrency reached about $50,191 in New York and is now up about 73% so far this year.
Skeptics of the cryptocurrency’s ability to go mainstream say it is rarely used for regular transactions and is too volatile to be a reliable store of value or hedge against inflation.
The reason for the increased bullish momentum despite higher prices, says Konstantin Anissimov, Executive Director at CEX.IO, is “corporate and institutional demand.” Anissimov also adds that “legal initiatives coming from American lawmakers and regional politicians” has had a positive impact on the adoption of cryptocurrencies as a whole.
Tesla Inc.’s announcement that it added $1.5 billion in Bitcoin to its balance sheet was the most visible recent catalyst, sending the price up 16% on Feb. 8, the biggest one-day gain since the Covid-19 inspired financial markets volatility in March.
The rush in 2021 by retail and institutional investors comes on top of a 300% rise last year as investors search for alternatives to the dollar because of the US Federal Reserve’s 0% interest rates. It traded at a few hundred dollars only five years earlier.
Meanwhile, smaller cryptocurrency ethereum edged 1.1% higher, just shy of its record high price of $1,874.98.