Bitcoin is largely hanging onto gains from its run to a record above $48,000 thanks to the endorsement of Elon Musk and Tesla Inc.’s $1.5 billion investment.
The largest digital currency was holding at about $45,000 as of 10:06 a.m. in London. Bitcoin has jumped roughly 20% this week, breaking through the prior top of almost $42,000. The wider Bloomberg Galaxy Crypto Index also touched a record recently.
Musk, the world’s richest person, has emerged as a central figure for crypto faithful who think Wall Street and the mainstream are becoming more receptive to digital coins. Others maintain speculators are behind Bitcoin’s rise and the bubble will once again burst.
Interest in cryptocurrencies has accelerated yet again as Musk, the world’s richest person, emerged as a central figure for the crypto faithful, supporting arguments among proponents that Wall Street and the mainstream are becoming more receptive to the asset class.
Detractors maintain speculators are behind Bitcoin’s rise and the bubble will once again burst.
Even before announcing Tesla’s bet on Bitcoin, Musk said he was a supporter of Bitcoin on a social audio app and made multiple tongue-in-cheek references on Twitter to Dogecoin — a Shiba Inu-themed crypto started as a joke — sending prices soaring.
Mastercard Inc. is the latest mainstream firm to embrace digital assets this week, announcing plans to begin allowing cardholders to transact in certain cryptocurrencies.
The company is also “actively engaging” with central banks around the world on their plans to launch new digital currencies, Mastercard said in a blog post on Wednesday.
“Mastercard’s plans to integrate crypto payments represents another indicator of the deep structural shifts taking place in our financial infrastructure,” said John Wu, president of Ava Labs.
“Incumbent payment platforms are embracing digital currency solutions that are more equipped for the borderless, internet-enabled economy.”
Twitter Inc. has also done some “upfront thinking” around how to handle Bitcoin, including if employees and vendors ask to be paid in the cryptocurrency and whether the firm needs to have the digital asset on its balance sheet, CFO Ned Segal said in an interview on CNBC.
“These are just the early innings of corporate adoption, as digital currencies are beginning to play a larger role in robust balance sheet management,” said Nathan Cox, chief investment officer at Two Prime, an investment firm specialized in digital asset and derivative strategy management.
While Tesla’s investment of $1.5 billion put the focus on whether more companies will buy Bitcoin, the purchase is a drop in the ocean compared to the holdings of America’s blue-chip corporates.
The purchase is worth just 0.05% of about $2.79 trillion of cash and cash-equivalents held on the balance sheets of S&P 500 members, according to data compiled by Bloomberg.
Wall Street Bets, the popular Reddit forum at the center of the retail investor frenzy, is talking about cryptocurrencies as well. The unverified Twitter account “Wallstreetbets mod” posted a call to buy Bitcoin and marijuana stocks.
Regulatory scrutiny remains a wild card for crypto investors. Treasury Secretary Janet Yellen, speaking at a Treasury forum for financial sector innovation, warned misuse of cryptocurrencies was a growing problem.
Yellen has previously raised concerns about the use of cryptocurrencies in illicit financing.