Cryptocurrency is beginning to attract more prolific investors.
Despite being around for nearly half a decade, the existence of cryptocurrency is still a bit of a confusing topic to the uninitiated. Skeptics of major cryptocurrencies like Bitcoin believe that it is a purely speculative asset with no intrinsic value, and that any booms it experiences are no more than simple investing bubbles. However, some people believe otherwise, and as it so happens, those particular people have enough spending power to drive Bitcoin to new heights.
During trading this morning, Bitcoin’s value rose 3% to $50,487, cracking a $50k valuation for the first time since the crypto’s inception. The rise was brief, as it promptly fell by 0.6% to $48,952, but the fact that it was able to hit that high is being viewed as a green light for its investors. The lion’s share of this boost came from large companies like Tesla and Mastercard announcing purchases of massive quantities of Bitcoin, as well as supporting its use as a regular currency. Following Tesla’s acquisition of $1.5 billion in Bitcoin last week, other companies have begun considering following suit and using corporate funds to boost the cryptocurrency.
— Cameron Winklevoss (@cameron) February 16, 2021
“I think bitcoin is a much more stable asset class today than it was three years ago,” Michael Saylor, CEO of enterprise software firm MicroStrategy, told CNBC. “It used to be dominated by leveraged retail traders … on international markets with a lot of leverage.”
MicroStrategy was one of the first firms to use the method of purchasing Bitcoin with corporate funds last year.
“I think that starting in March of 2020, you saw institutions start to arrive, and I think in 2021 you’re going to see that trend continue,” Saylor added. “There’re enthusiasts for bitcoin as a medium of exchange, … but I personally believe that the compelling use case is a store of value.”