Bitcoin soared, approaching $ 50,000 for the first time

Bitcoin soared, approaching $ 50,000 for the first time

The Digital currency It reached a record high of $ 49,714.66 on Sunday before easing somewhat. Bitcoin It’s still up 4% in the past 24 hours.

Investors sent bitcoin prices skyrocketing during the pandemic as the Federal Reserve cut interest rates to near zero in March 2020 (and expects to keep them there for several more years), drastically weakening the US dollar.

This makes Bitcoin a relatively attractive currency. There is a certain limit to the number of bitcoins on the planet, and investors believe that once the supply runs out, the digital currency’s value can only increase.

As Bitcoin rises to an all-time high, large brand-invested investors are hoarding it, and huge consumer companies are embracing it, helping Bitcoin’s value soar.

Last week, Tesla said it might be Soon digital currency will be accepted as a method of payment For its cars. And the Tesla, (TSLA) The car company, the most valuable stock market, said it is keeping some of its cash in Bitcoin instead of the traditional currency.
On Wednesday, MasterCard announced that it will do so Support “identification of cryptocurrencies” directly on its network Later this year. This was a milestone in Bitcoin: Square (Sk) And the PayPal (PYPL) It recently started allowing clients to trade bitcoin, but Mastercard will be the most popular bitcoin platform to date.
This adds a dose of viability and appeal to cryptocurrencies for ordinary investors. For example, a senior BlackRock executive said last year that bitcoin could someday replace gold. Twitter CEO Jay-Z and Jack Dorsey announced Friday that the couple are creating a file Bitcoin Development Fund.
Bitcoin crossed $ 20,000 for the first time in December, and it worked More than doubled In value in three months.

Risk appetite

The recent rise in cryptocurrency is still showing Signs of melting Excessive enthusiasm fueled by a fear of missing out, not just market fundamentals. Take Elon Musk’s mocking tweets about Bitcoin’s rival Dogecoin in recent months: the digital currency, which itself was created as a parody of cryptocurrencies, It jumped 50% earlier this month After Musk tweeted, but he crashed last week.
Anthony Scaramucci, founder of Skybridge Capital, has a significant stake in Bitcoin and A. Funds directed toward wealthy investorsSkyBridge Bitcoin LP. But he even says people need attention. He told CNN Business last month that it could be a solid addition to the average investor’s portfolio – but you have to be bold for that. After all, bitcoin prices collapsed below $ 4,000 shortly after hitting their previous peak of just under $ 20,000 in December 2017.

“It might be the bursting of a big bubble,” Scaramucci told CNN Business in January. “We expect the fund to be volatile and may lose money”

Scaramucci said bitcoin could suddenly drop 20% to 50%. But it is also highlighted Bitcoin’s residual strength over the past decade: If you took a dollar and put 99 cents of it in cash and a penny into bitcoin, this investment strategy would outpace the $ 1 invested in the S&P 500 over the past 10 years, he noted.

“The most likely course is that people could win an enormous amount of money. Bitcoin is not tied to Fed policy or gold supply issues,” he said. “There is now more demand for bitcoin than supply. The price has to go up.”

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Paul R La Monica of CNN Business contributed to this report.

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