Bitcoin reached a new record, approaching $ 50,000, as the world’s largest cryptocurrency extended its dizzying rise.
The cryptocurrency rose by as much as 3.6% to $ 49,913 in Asian trading on Tuesday, rising 5 times over the past year, higher than the returns on traditional investments such as stocks, gold and commodities.
Bitcoin’s rise was supported by a wider adoption of the cryptocurrency, most notably Tesla this month unveiling a $ 1.5 billion purchase. However, debate continues over whether the token has any intrinsic value at all, amid warnings that investors could take large losses because cryptocurrencies remain highly speculative.
“Bitcoin volatility is likely to continue to rise in the near term and remain elevated until it settles around a next summit,” said Mike McGlone, commodity strategist at Bloomberg Intelligence, adding that $ 100,000 could be a long-term target.
A series of recent announcements indicate that Bitcoin is getting more attention, after the purchase of Tesla pushed cryptocurrencies onto the agenda of asset managers around the world.
For example, Morgan Stanley’s investment unit is considering whether to bet on Bitcoin, according to people familiar with the subject, and in Canada, officials approved the first fund to trade in North America for Bitcoin.
Bank of New York Mellon also said that it has formed a new team working to develop an incubation and management platform for traditional and digital assets, while MasterCard plans to allow card holders to deal in certain cryptocurrencies on its network.
Managing partner at blockchain consulting firm Kinetic Capital, Jihan Chu, said the growing interest in Bitcoin is starting to flame due to Tesla’s move.