Bitcoin jumps to a new high above $51,700, extending its year-to-date rally to 78%

A visual representation of the digital Cryptocurrency, Bitcoin is on display in front of the Bitcoin course's graph
  • The bitcoin price hit a new high above $51,700 after breaking the $50,000 mark on Tuesday.
  • Yet JPMorgan said the rally looks unsustainable unless bitcoin’s volatility falls.
  • Bitcoin’s market capitalization has skyrocketed to close to $1 trillion.
  • Visit the Business section of Insider for more stories.

The bitcoin price hit a record high above $51,700 on Wednesday after soaring past $50,000 for the first time the previous day. The surge brought the biggest cryptocurrency’s market capitalization to close to $1 trillion.

The bitcoin price (BTC) has rocketed around 75% in 2021, continuing an astonishing rally after dipping below $4,000 in March 2020. Its market cap has grown by more than $700 billion just since the end of September.

Bitcoin was up 4.6%, to $50,817.80, as of 9:40 a.m. ET on Wednesday, having earlier hit an intraday record of $51,719.11.

Analysts say record amounts of monetary and fiscal stimulus are boosting the price by flooding markets with cash and creating fears about inflation and currency debasement.

Tesla’s announcement earlier in February that it had snapped up $1.5 billion of bitcoin in January has powered the latest leg of the rally. Interest from big Wall Street names such as BlackRock, BNY Mellon and Mastercard has also given cryptocurrencies legitimacy.

However, analysts at JPMorgan on Tuesday said that the high volatility of bitcoin remained a problem for the digital asset.

They said the cryptocurrency was far more volatile than gold, which many crypto enthusiasts are hoping bitcoin can replace as a store of value in investors’ portfolios. One measure, called 3-month realized volatility, was 87% for bitcoin compared to 16% for gold, they said.

“In our opinion, unless bitcoin volatility subsides quickly from here, its current price… looks unsustainable,” the analysts said.

JPMorgan also said that its analysis had showed the rapid rise in bitcoin over the last 5 months “has taken place with relatively little institutional flows.”

“Some pickup in real money flows would likely be needed to sustain current prices in the absence of a re-acceleration of the retail flow,” the note said.

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Bitcoin climbs 4% to a new high before paring gains as the cryptocurrency’s record-breaking surge continues

A visual representation of the digital Cryptocurrency, Bitcoin is on display in front of the Bitcoin course's graph
A visual representation of the digital Cryptocurrency, Bitcoin is on display in front of the Bitcoin course’s graph

Bitcoin’s rally continues, as the token touched a new 24-hour record high late Thursday before paring gains on Friday.

The popular cryptocurrency rose 4% to a new 24-hour high of 48,929.36 at 7:08PM E.T. Thursday evening.

Institutional backing from industry giants including Tesla, Mastercard, and Bank of New York Mellon has fueled the cryptocurrency’s surge, which broke one record after another in just the last week. In other developments, Andrew Yang on Thursday said he will transform New York City into a hub of cryptocurrencies if elected as mayor.

The price of bitcoin has swung wildly in the past months climbing from around $19,000 in December to its current price approaching $50,000.

“Yes, [bitcoin] has risks but where there are risks, there are definitely also opportunities,” Julius de Kempenaer, senior technical analyst at StockCharts told Insider. “But for those who know what they are doing, have proper risk management in place, can handle the stress, and can afford the potential losses – give it a go.”

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Bitcoin surges 7% to a record high amid new adoption from Mastercard and BNY Mellon

bitcoin

Bitcoin hit a fresh record Thursday, soaring to new highs following continued buy-in from major institutions. 

On Thursday, Mastercard announced it will allow merchants to accept select cryptocurrencies on its network starting later this year, while Bank of New York Mellon said that it will issue, hold, and transfer bitcoin for clients in the future.

The price of bitcoin surged to an intraday high of $48,364.06 on Thursday. It is the second time the world’s most popular cryptocurrency has blown past the $48,000-mark this week.

Mastercard joins a handful of companies embracing digital tokens as payment. Earlier this week, Tesla said it will also start accepting bitcoin as payment for its products, while also disclosing a  $1.5 billion bitcoin investment. The price of the digital asset spiked to record levels on the news.  

BNY Mellon on Thursday said it is exploring how to allow cryptocurrency assets to pass through the same financial network it uses for more traditional holdings such as stocks and bonds, the Wall Street Journal first reported.

Bitcoin – which is not regulated by any central authority – has risen more than 60% since the start of this year, lifted by increasing demand from institutions, celebrities, and large investors. 

The token, however, has faced scrutiny from policymakers and regulators as the price continues to skyrocket. US Treasury Secretary Janet Yellen on Wednesday called the “misuse of cryptocurrencies” a growing problem. 

“I see the promise of these new technologies, but I also see the reality: cryptocurrencies have been used to launder the profits of online drug traffickers; they’ve been a tool to finance terrorism,” Yellen said.

Read more: Bank of America shares 9 stocks to buy as the pandemic prompts consumers to shift their spending habits towards ‘solitary leisure’ activities like golf and biking

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