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Bitcoin breaks above $50,000 for first time ever

Bitcoin breaks above $50,000 for first time ever

FILE PHOTO: A collection of bitcoin tokens are displayed in this picture illustration taken on Dec 8, 2017. (Photo: Reuters/Benoit Tessier)

LONDON: Bitcoin rose above US$50,000 on Tuesday (Feb 16) to a new record high, building on rally fuelled by signs that the world's biggest cryptocurrency is gaining acceptance amongst mainstream investors.

Bitcoin hit a new high of US$50,000, and was last up 3.9 per cent at US$49,891. It has risen around 72 per cent so far this year, most of that after electric carmaker Tesla said it bought US$1.5 billion in bitcoin and would accept the currency as payment.

Tesla's move was the latest in a string of large investments that have vaulted bitcoin from the fringes of finance to company balance sheets and Wall Street dealing desks, as US firms and traditional money managers have started to buy a lot of it.

READ: Tesla buys US$1.5 billion in bitcoin, to accept it as payment for cars soon

READ: Commentary - Amid record high value, Tesla's bitcoin bet raises uncomfortable questions

The soaring cryptocurrency, which was near worthless a decade ago when software developer Laszlo Hanyecz paid 10,000 bitcoins for two pizzas, surpassed US$20,000 only in mid-December.

The cryptocurrency was created by the mysterious Satoshi Nakamoto, whose real identity is unknown and is based on blockchain technology which acts like public ledger of transactions. It began circulating in 2009, mostly among speculators - something which is beginning to change.

READ: Bitcoin's mainstream charge raises stakes for central bank digital cash

READ: Twitter chief Dorsey teams with Jay-Z to back bitcoin

Business software firm MicroStrategy made the first of several multimillion-dollar bitcoin purchases in August and a number of Wall Street fund managers, such as billionaire Stanley Druckenmiller, now sound positive on the asset.

PayPal is allowing customers to use bitcoin at its merchants and Mastercard preparing to do likewise, moves which bring both opportunity and risk.

"The more mainstream the digital currency becomes, the more we should expect regulators to pay attention," said Mike O'Rourke, chief market strategist at JonesTrading.

Source: Reuters

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