Bitcoin Rises Back To $50,000

Bitcoin on Tuesday surpassed $50,000 for the first time as institutional investors and businesses fuel a historic rally that has lifted the digital currency more than 70 percent this year.

The largest cryptocurrency by market value, bitcoin peaked at $50,584.85, before pulling back. That’s more than double its price from the trading frenzy in late 2017, when bitcoin burst onto the broader public scene and seized widespread attention. It dropped down to $48,656 by late afternoon.

The cryptocurrency’s record climb comes as many large-asset management companies have begun recommending the asset, pulling bitcoin further into the financial mainstream. Its total market value exceeds $906 billion.

Even as the coronavirus has battered the U.S. economy, financial markets continue to swell. The three major U.S. stock indexes set record highs last week and were trading near those levels Tuesday as investors monitored news of President Biden’s proposed $1.9 trillion aid package and the national vaccine rollout.

The S&P 500 retreated slightly from Friday’s record close, dipping 0.06 percent, or 2.24 points, to 3,932.59. It’s still up nearly 5 percent for the year. The Dow Jones industrial average inched up 64.35 points, or 0.2 percent, to a record 31,522.75. The tech-heavy Nasdaq sank 47.97 points, or more than 0.3 percent, to end at 14,047.50.

While the previous cryptocurrency rally was dismissed by many professional investors and financial institutions, bitcoin’s latest ascent arrives alongside increasing interest from Wall Street.

At the end of 2017, experts note, retail investors had scrambled to grab a piece of bitcoin, which peaked above $20,000, only to see prices plummet 80 percent the following year. The astounding rise and crash has drawn parallels to the recent GameStop trading chaos, in which many ordinary investors were left with significant losses after chasing a headline-grabbing asset.

But a key difference with the current run up, they say, is the interest from institutional investors.

“From PayPal and Square, to the likes of Nvidia, Tesla, IBM, Visa, Mastercard and many other companies across verticals, we believe the trend of transactions, bitcoin investments, and blockchain driven initiatives could surge over the coming years as this bitcoin mania is not a fad in our opinion, but rather the start of a new age on the digital currency front,” Dan Ives, managing director of equity research at Wedbush Securities, wrote in a note Monday.

Source: Washington Post.