The price of Bitcoin’s virtual cryptocurrency is shown on a phone screen in this photo.
STR | NurPhoto | Getty Images
Bitcoin’s price roared back on Wednesday after a sharp sell-off, climbing above $ 50,000 again when Square announced it had purchased $ 170 million worth of cryptocurrency.
At 4 a.m.ET, the world’s most valuable digital coin rose 7.5% to a price of $ 50,683, according to data from Coin Metrics. The cryptocurrency climbed as high as $ 51,369 a few hours earlier.
Other cryptocurrencies also received a boost, with ether and XRP rising 11.3% and 7.4% respectively. So-called altcoins, or alternative cryptocurrencies, often climb in times of strength for bitcoin.
On Tuesday, Square announced that it had bought 3,318 bitcoins at an average price of about $ 51,235. The fintech company, which is run by Twitter CEO Jack Dorsey, said bitcoin now represents about 5% of its total assets.
It’s not the first time Square has invested in bitcoin – the company bought $ 50 million worth of digital currency last year. Dorsey is one of bitcoin’s best-known proponents and has once said that he believes it will eventually become the Internet’s “common currency”.
Bitcoin got off to a tough start to the week, falling from a record high of $ 58,356 on Sunday to a low of $ 45,501 on Tuesday. It’s not uncommon for bitcoin to undergo wild bouts of volatility – the digital token infamously climbed to nearly $ 20,000 in 2017 before entering a bear market the following year.
Bitcoin is still up more than 70% since the beginning of the year and more than 400% in the last 12 months. The crypto asset’s stunning rally has caught the attention of everyone from Tesla CEO Elon Musk to US Treasury Secretary Janet Yellen.
Earlier this week, Yellen called bitcoin an “extremely inefficient” means of payment and warned against its use in illegal activities.
“It’s a highly speculative asset and … I think people should be aware that it can be extremely volatile,” the former Federal Reserve Chairman said at a DealBook conference in the New York Times. “I am concerned about possible losses that investors may suffer.”
Musk, meanwhile, has come out as a proponent of bitcoin. His electric car company recently invested $ 1.5 billion in business money in the cryptocurrency, and the billionaire tech entrepreneur said he thinks it is “on the verge of widespread adoption” among conventional financial services firms.
But even Musk has suggested that bitcoin’s current price levels could be unsustainable, tweeting this weekend that he thinks bitcoin and rival token ether prices “seem high.”