Bitcoin topped $50,000 for the first time Tuesday 17th Feb, doubling in value in less than 8 weeks. The digital currency traded as high as $50,580, before closing at $48,642, up 0.95% for the day and 68% for the year, with a total market value in circulation close to $909 billion.
The $50,000 level is an emotional level for people but it is also a simple result of supply and demand. From August through December, about 150,000 new bitcoins were minted, and we believe about 360,000 bitcoins were bought in the same period, and that imbalance has continued in 2021.
The Bank of New York Mellon Corp. said it would start treating bitcoin like any other financial asset, and Mastercard said it would integrate bitcoin into its payments network this year. Tesla puchased $1.5 billion worth of the cryptocurrency for its corporate treasury and plans to start accepting it for payment for its Electric Vehicles.
However, critics say it is less of a currency and more a speculative fixation, and that its price may be due in part to market manipulation. Most commodities, even gold, have some physical use, Bitcoin though, has very little practical use and doesn’t provide a steady income like I’d end yields from stocks and shares.