The price of bitcoin soared to more than $50,000 on Tuesday, galvanized by the interest of major banks, companies like Tesla and investors with a keen appetite for risk.
Bitcoin rose to an all-time high of $50,547.70.
It then fell back to cost $49,130.50 around 8:35 a.m. (Montreal time), up 1.9% for the session and nearly 70% since the beginning of the year.
After a dizzying performance in 2020, Bitcoin has seen its value increase fivefold in the last year. With more than 18.6 million bitcoins issued since its creation by anonymous investors in 2008, the entire market is theoretically worth more than 923 billion dollars.
While some market observers are wary of the volatility of this decentralized, asset-free market, others believe the situation is very different from 2017, when prices had climbed even higher before crashing in early 2018.
« A growing business interest in crypto-currency has transformed the market compared to 2017, » said Neil Wilson, Markets.com analyst.
Last week, electric car maker Tesla created a surprise by announcing that it had invested $1.5 billion of its cash in Bitcoin.
Tesla’s boss and the world’s richest man, Elon Musk, doesn’t hesitate to extol the merits of cryptomoney on social networks.
On Tuesday, the MicroStrategy Group, a mid-size US software company that made a massive investment in Bitcoin at the end of 2020, to allow Wall Street investors to bet on cryptography by buying their shares, announced a $600 million fund raising « to buy Bitcoin ».
In addition, banking and financial groups are increasingly interested in Bitcoin: the oldest bank on Wall Street, BNY Mellon, and MasterCard followed the example last week of the giant BlackRock or the payment service PayPal, which have announced new projects on encryption in recent months.
« The approval of an exchange-traded Bitcoin index fund in Canada is a hopeful sign, » adds Timo Emden, a German-based cryptomastics analyst, who believes that if a similar financial product were approved in the United States, it would be proof of the total « democratization » of cryptomastics.
However, there is no unanimity on the cryptomoney market: several central bankers have rejected the idea of considering Bitcoin as a separate currency.
« I don’t think digital currencies as originally conceived » meet the criteria « for governance of a sustainable digital currency, » Bank of England Governor Andrew Bailey said at the end of January.
Yet central banks’ monetary policy benefits cryptomoney. In an attempt to prevent the economic wreck promised by the COVID-19 pandemic, institutions have adopted very low or negative rates and are flooding the market with liquidity, pushing investors towards the riskiest assets.
And for some, since Bitcoin depends on a decentralized network and can never be influenced by monetary policy in the same way as the euro or the dollar, it is the perfect investment to hedge against inflation.
For others, buying Bitcoin simply represents « a fear of missing the train, » said Naeem Aslam, an analyst at Ava Trade.