Bitcoin reaches a milestone by exceeding $50,000

Bitcoin reaches a milestone by exceeding $50,000

(Updated with details, courses and comments)

LONDON, Feb. 16 (Reuters) – Bitcoin surpassed the $50,000 mark for the first time on Tuesday, the most emblematic of the cryptoskills, thus crossing a new threshold towards wide acceptance by the general public as well as by the world of finance.

Bitcoin earned 2.1% at $48,947.66 at 2:40 p.m., just over an hour after passing the $50,000 mark.

It has gained more than 70% since the beginning of the year with a clear acceleration after Tesla announced last week that it would invest $1.5 billion (€1.23 billion) and prepare to accept it as a means of payment for its electric cars.

Tesla’s boss and founder, Elon Musk, is one of the strongest supporters of an asset that is still decried by its opponents as volatile and highly speculative but increasingly accepted by investors.

« Musk’s intervention has created interest and the more people adopt it and use it as a means of payment, the more likely it is to become a mainstream currency, which would also fuel speculators’ interest, » comments Russ Mould, investment director at AJ Bell.

Bitcoin, which has the advantage of having a very low correlation to other assets and the market environment, is increasingly being used by investors as a diversification strategy.

It is already no longer the preserve of a few fanatics, as illustrated recently by BlackRock, the world’s leading asset manager, changing the rules applicable to some of its funds to allow them to invest in Bitcoin.

In another sign of the ongoing acceleration, buy positions in Bitcoin supplanted for the first time in January those in technology stocks as a favourite theme for investors, according to Bank of America’s monthly survey of fund managers.

However, it remains to be wielded with tweezers, recalls Jacob Skaaning of the ARK36 hedge fund, which specialises in cryptomoney.

« Market conditions and events in both the crypto universe and the wider world of finance have allowed this kind of price movement, » he says.

« However, I would like to urge caution. My long-term view remains bullish, but significant price fluctuations are to be expected. Bitcoin remains extremely volatile. »

Central banks continue to be skeptical about the rise of this type of asset. Christine Lagarde, President of the European Central Bank (ECB), judged at the beginning of the month that Bitcoin was a « speculative asset » and not a currency.

« There is a risk of intervention (by central banks), » said Russ Mould. « The rules can be changed… but the more people start using it and giving it more legitimacy, the harder it will be for central banks to contain it. »

Regulators are increasingly interested in the world of cryptography, which is far from being just Bitcoin.

Ethereum, Bitcoin’s great rival, is trading Tuesday very close to its record level, above 1,800 dollars. The dogecoin, for its part, recently came into the spotlight when Elon Musk, again, propelled it to a record by supporting it on Twitter. (Thyagaraju Adinarayan, French version Patrick Vignal, edited by Jean-Michel Bélot)

Bitcoin reaches a milestone by exceeding $50,000
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