Bitcoin jumped again on Wednesday to set another all-time high after breaching US$50Â 000 for the first time a day earlier.
The largest cryptocurrency rose as much as 4.8% to about $50Â 927, according to a composite of prices compiled by Bloomberg. The token is up more than five-fold in the past year.
Bitcoin’s rally for some is emblematic of speculative froth in financial markets awash with stimulus. The crypto faithful counter that the digital asset is grabbing more mainstream attention, especially after Tesla’s recent $1.5-billion purchase. MicroStrategy said Tuesday it would sell $600-million of convertible bonds and use the proceeds to buy more of the tokens.
MicroStrategy’s step is “a warning sign if there ever was one that things are getting out of hand in the crypto world”, Jeffrey Halley, a senior market analyst at Oanda Asia Pacific, wrote in e-mailed comments.
Others take a different view, contending that demand from institutional investors and companies is set to expand, driving further gains.
“There are a number of reasons why bitcoin is soaring, but what stands out most is the trend that MicroStrategy started and Tesla popularised: moving institutional balance sheets into bitcoin to hedge against inflation,” said Nicholas Pelecanos, head of trading at NEM. — Reported by Eric Lam, (c) 2021 Bloomberg LP