Bitcoin Extends Its Rally to an All-Time High Close to $50,000
Bitcoin reached another record, coming ever closer to $50,000, as the cryptocurrency extends its breathtaking rally.
(Bloomberg) -- Bitcoin reached another record, coming ever closer to $50,000, as the world’s largest cryptocurrency extends its breathtaking rally.
The token climbed as much as 3.6% to $49,913 in Asian trading Tuesday, according to a composite of prices compiled by Bloomberg. Prices fell back later in the session and were last trading around $49,000.
Bitcoin’s volatile, fivefold advance over the past year towers above the returns from more traditional investments like stocks, gold and commodities.
The ascent has been buoyed by the widening adoption of the cryptocurrency, most notably Tesla Inc.’s disclosure this month of a $1.5 billion purchase. Yet a debate continues about whether the token has any intrinsic value at all, amid warnings that investors could be left with big losses because cryptocurrencies remain highly speculative.
“Bitcoin volatility is likely to continue rising in the near term and remain elevated until it settles in around its next plateau,” said Mike McGlone, a commodity strategist at Bloomberg Intelligence, who added that $100,000 may be a longer term target.
A flurry of recent announcements indicates that Bitcoin is winning more mainstream attention, after Tesla’s purchase catapulted cryptocurrencies onto the agenda of corporate treasurers worldwide.
For instance, an investment unit of Morgan Stanley is considering whether to bet on Bitcoin, according to people with knowledge of the matter. In Canada, officials approved the first North American Bitcoin exchange-traded fund.
Growing interest in Bitcoin was “set ablaze” by Tesla’s move, said Jehan Chu, managing partner with blockchain advisory firm Kenetic Capital in Hong Kong.
Volatility
Digital tokens had already caught the attention of hedge fund moguls including Alan Howard and Paul Tudor Jones. On one disputed narrative, Bitcoin is a kind of digital bullion that provides a store of value as well as a hedge for risks such as faster inflation. That’s in part because it’s designed to have a fixed supply of 21 million coins.
Amid the hype, there continue to be warnings that cryptocurrencies are prone to wild price swings, deployed for illicit transactions and exposed to tightening regulations -- storing up a lot of risk.
“It’s important to remember that Bitcoin never moves up in a straight line,” said Antoni Trenchev, managing partner and co-founder of Nexo in London, one of the biggest crypto lenders. “Short-term volatility is very much a feature of this bull market and investors should prepare accordingly.”
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