Bitcoin hit a new record high on Saturday, crossing the $60,000 threshold for the first time. The world’s biggest cryptocurrency has seen an overwhelming increase since late 2020 following growing acceptance by institutions.
Big corporations and traditional financial firms that previously shunned the cryptocurrency are now embracing it, shooting its market value well above $1 trillion.
Bitcoin is testing the sound barrier at $60k, and institutional investment continues to build momentum with Chinese internet firm Meitu the latest to execute a bitcoin treasury strategy, Jehan Chu, co-founder and managing partner of Kenetic, a Hong Kong-based trading firm said.
The Beeple NFT auctioned by Christies yesterday for $69.3 million is said to have boosted the cryptocurrency market movement.
Volatility became one of the global concerns to both investors and regulators as cryptocurrency popularity grows. Bitcoin hit $58,330 all-time high on Feb. 21 but retreated to $43,000 soon after, instigating fresh concern amidst US debate over the stimulus package.
The institutional backing from big tech has seen generous investment in bitcoin to allay the fear of volatility that has been hindering investors from putting their money into the wonder coin.
Last month, world’s most valuable automaker, Tesla, revealed it has invested $1.5 billion in bitcoin and would accept the coin as a form of payment. In the same month, BNY Mellon said it has formed a new unit to help clients hold, transfer and issue digital assets. Canada’s Ontario Securities Commission also approved the launch of the Purpose Bitcoin ETF. The approval makes it the first North American Bitcoin ETF.
MasterCard also announced it will allow customer-to-merchant payments in cryptocurrency this year, without the need to settle in fiat.
Our change to supporting digital assets directly will allow many more merchants to accept crypto, an ability that’s currently limited by proprietary methods unique to each digital asset. This change will also cut out inefficiencies, letting both consumers and merchants avoid having to convert back and forth between crypto and traditional to make purchases, the payment platform said in a statement.
Although MasterCard already works in partnership with crypto payment firms such as BitPay and Wirex on cryptocurrency debit cards, the move underscores a shift to enable cryptocurrencies, particularly bitcoin, to be used directly for transactions through its network.
Last month, after bitcoin’s retreat, Twitter CEO Jack Dorsey announced he’s teaming up with rapper Jay-Z to create Trust, a blind bitcoin development trust, a move that has been linked to the streaming platform Tidal, acquired by Twitter early this month. Dorsey had earlier invested in bitcoin using his payment company Square. The Trust is worth 500 BTC ($23.7m) and will focus on India and Africa for a start.
These backings have lifted bitcoins credibility from the shackles of volatility limiting investors interest. The new high puts the total market cap at $1.12 trillion, closing in on Alphabet, Google’s parent company’s $1.385 trillion market value, according to CompaniesMarketCap.com.
For bitcoin, which was at $4,916.78 this time last year, hitting $60,000 new high is remarkable.
While the concern of volatility remains, Jehan Chu said the price will keep rising.
Further, Beeples $69 million NFT record demonstrates the true power of crypto, adding curiosity and fuel to the retail fire. Expect volatility but a landing of $100k levels by Q3, he said.