Bitcoin has crossed the $50,000 (£36,000) barrier for the first time on the back of surging demand for the so-called crypto king among mainstream investors.
The cryptocurrency, which has endured wild swings in its value during a chequered 12-year history, struck a record high above $50,100 on Tuesday, according to the CEX.IO exchange.
The milestone was reached as traditional jitters over its legitimacy are cast aside through growing demand among corporate and institutional investors.
The clamour for a piece of the action has seen its value surge by more than 70% this year alone.
The buying trend was set just over a fortnight ago when Elon Musk’s Tesla said it had invested $1.5bn (£1.08bn) in Bitcoin and would soon start accepting it as a form of payment for its cars and other products.Advertisementnull
Market commentators pointed out that the electric car firm’s interests alone could have risen since, by up to $750m.
Mastercard, PayPal and even some investment banks have been among others to have publicly supported crypto assets and exchanges have reported a surge in purchases from dealing desks as a result.
Naeem Aslam, chief market analyst at Bitcoin broker AvaTrade, said: “Institutions are all over it.
“There is a lot of FOMO (fear of missing out) among traders as the price is going through the roof and we have limited supply.”
He argued that the currency’s history of wild fluctuations in value was more likely to be curbed as a result of the new investors.
“Given the fact that billionaire, US corporate, and institutional clients are supporting the current rally, the Bitcoin volatility has tamed to a larger extent.
“The next target, once the price moves about 50K, is really the 65K.”
Global regulators, including central banks, continue to urge a cautious approach to cryptocurrency trading given a lack of oversight.
In the UK, for example, the Financial Conduct Authority only has regulatory powers over Bitcoin in two areas: terrorist financing and money laundering.
However, mainstream market involvement in Bitcoin bolsters pressure on the authorities to create a framework as the currency finds itself on the books of companies that come under their regulatory remits.