You are currently viewing our desktop site, do you want to download our app instead?
Moneyweb Android App Moneyweb iOS App Moneyweb Mobile Web App

Bitcoin scales $51 000 for the first time

Amid crypto fever.
Image: Andrey Rudakov/Bloomberg

Bitcoin’s incredible rally shows little sign of abating yet after the token jumped past $51 000 for the first time.

The largest cryptocurrency rose almost 6% Wednesday to about $51 431 after a fivefold surge in the past year, according to a composite of prices compiled by Bloomberg. The Bloomberg Galaxy Crypto Index reached a record.

Moneyweb Insider INSIDERGOLD

Subscribe for full access to all our share and unit trust data tools, our award-winning articles, and support quality journalism in the process.

Choose an option:

R63 per month
R630 per year SAVE R126

You will be redirected to a checkout page.
To view all features and options, click here.

A monthly subscription is charged pro rata, based on the day of purchase. This is non-refundable and includes a R5 once-off sign-up fee.
A yearly subscription is refundable within 14 days of purchase and includes a 365-day membership.

Click here for more information.

Bitcoin’s rally for some is emblematic of speculative froth in financial markets awash with stimulus. The crypto faithful counter that the digital asset is grabbing more mainstream attention, especially after Tesla’s recent $1.5 billion purchase. MicroStrategy Inc. said Tuesday it would sell $600 million of convertible bonds and use the proceeds to buy more of the tokens.

MicroStrategy’s step is “a warning sign if there ever was one that things are getting out of hand in the crypto world,” Jeffrey Halley, a senior market analyst at Oanda Asia Pacific Pte, wrote in emailed comments.

Others take a different view, contending that demand from institutional investors and companies is set to expand, driving further gains.

“There are a number of reasons why Bitcoin is soaring, but what stands out most is the trend that MicroStrategy started and Tesla popularised: moving institutional balance sheets into Bitcoin to hedge against inflation,” said Nicholas Pelecanos, head of trading at NEM.

Activity in Bitcoin futures suggests traders don’t see a sudden end to the crypto rally, with spreads continuing to widen between the active contract and March futures, according to data compiled by Bloomberg.

Shares of Asian crypto-linked companies are advancing too. Japan’s Monex Group Inc. jumped 11% to hit a 13-year high, while BC Technology Group Ltd. in Hong Kong closed at a record.

JPMorgan Chase & Co. strategists said Bitcoin’s volatility needs to ease to prevent its rally from fizzling. Other commentators see a mania likely to end in a bust akin to the implosion in 2017.

The digital coin’s 60-day realised volatility is around the highest since May last year, though still below the levels seen around the peak of its last boom some three years ago.

© 2021 Bloomberg

COMMENTS   1

You must be signed in to comment.

SIGN IN SIGN UP

Bitcoin is not dirt-cheap, but one wonders how much higher it will go.

End of comments.

LATEST CURRENCIES  

USD / ZAR
GBP / ZAR
EUR / ZAR

Podcasts

INSIDER SUBSCRIPTIONS APP VIDEOS RADIO / PODCASTS SHOP OFFERS WEBINARS NEWSLETTERS TRENDING PORTFOLIO TOOL CPD HUB

Follow us:

Search Articles: Advanced Search
Click a Company: