Igor Golovniov | LightRocket | Getty Images
Bitcoin rallied above the USD 51,000 level for the first time on Wednesday.
The red-hot cryptocurrency hit a new record price of $ 51,715 at around 4:50 ET, according to Coin Metrics data. The latter traded more than 5% higher at $ 51,228.
Bitcoin was created in 2009, not long after the global financial crisis. It has grown from a protest against the banking system to something of a “digital gold” starting to catch on with mainstream investors.
On Wall Street, major investment banks seem to be heating up for bitcoin. JPMorgan recently said it is seriously looking at the asset class, and Goldman Sachs has also expressed interest in crypto. A division of Morgan Stanley is reportedly considering adding bitcoin to the list of possible bets.
Companies such as PayPal and Mastercard have taken important steps to support cryptocurrencies. And Tesla said last week it had invested $ 1.5 billion in bitcoin and planned to accept the digital currency as payment for its products.
Bitcoin’s latest rally has reminded many investors of its massive surge to nearly $ 20,000 in 2017, which was followed by a plunge the following year in which the digital currency lost 80% of its value.
But the world’s most valuable cryptocurrency has since made a fierce comeback, more than quadrupling in 2020 and up more than 70% this year.
Bitcoin advocates say this is due to increased demand from institutional investors and the buying of digital currencies by companies such as Tesla, Square and MicroStrategy. Skeptics, on the other hand, worry that bitcoin may be the biggest market bubble in the financial markets.
JPMorgan strategists warned in a note on Tuesday that unless bitcoin volatility begins to wane, the current price “seems unsustainable.” Bitcoin and other cryptocurrencies have gained a reputation for their extreme price swings.