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12 Feb 2021
3 min read

Bitcoin Keeps Steady Near $48,000 as More Adoption Arrives

Bitcoin Keeps Steady Near $48,000 as More Adoption Arrives

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Key Takeaways

  • Bitcoin gravitates towards a record high
  • More financial institutions embrace bitcoin, are we heading for mass adoption?

The price of bitcoin remains near the $48,000 record level mark as adoption increases. On Thursday, the digital asset was boosted by two major US financial institutions announcing support for cryptocurrencies. Mastercard jumped on the bandwagon late on Wednesday when the company announced that it will support “select cryptocurrencies” on its card payment network later this year. The company had previously offered to move funds after they had been converted from cryptocurrency into fiat currency.

“Our philosophy on cryptocurrencies is straightforward: It’s about choice,” said Raj Dhamodharan, an executive vice president at Mastercard. “Whatever your opinions on cryptocurrencies — from a dyed-in-wool fanatic to utter skeptic — the fact remains that these digital assets are becoming a more important part of the payments world.” Mr. Dhamodharan wrote on Mastercard’s blog. This major milestone for bitcoin brings it a step closer to mainstream use in ordinary purchases.

Another step towards large-scale adoption of the largest cryptocurrency was taken on Thursday. BNY Mellon, one of the largest asset managers in the world, announced that it will provide custody services for digital assets in 2021. These services will be offered on the same platform that hosts traditional securities and cash.

The announcements pushed bitcoin to a record high as the price peaked above $48,000 for the first time.

A Whirlwind Week for Bitcoin

It has been a wild week for bitcoin. Starting Monday, the largest cryptocurrency soared 20% and reached above $44,800, a record at the time. The spike came after the news that Tesla will accept bitcoin as payment for its electric vehicles. On top of that, the company disclosed it now holds $1.5bn in bitcoin as part of its cash holdings.

The news from Wednesday and Thursday continued to feed the recent buying momentum in bitcoin. The price now hovers near the record levels of $48,000, currently at $47,400, up over 4% on Friday. The most recent spike in bitcoin’s price is attributed to Elon Musk. On Thursday the mogul posted an image of a bitcoin-themed ring on Twitter. After the tweet, the price of bitcoin rose as much as 7% or $4,000 to trade near the $48,000 mark.

The Tesla chief has recently cemented his status as tweets and memes virtuoso. Indeed, both have become powerful tools for shaping popular opinion. His series of market-moving tweets on dogecoin and bitcoin has created a polarizing discussion about the impact of his Twitter account and the financial power of the company that he leads. Supporters say Tesla’s decision is a massive win for the crypto crowd and a serious step towards corporate adoption. On the other hand, his public involvement in cryptocurrency and price-boosting tweets raise the speculation activities in the market, posing increased risks for investors.

Elon Musk’s involvement in cryptocurrency, and more importantly, Tesla’s purchase of $1.5bn worth of bitcoin could put the billionaire chief executive in hot water with regulators. Lawyers have been warning

Mr. Musk that he could face questions from the US Securities and Exchange Commission over the “facts and circumstances” of Tesla’s bitcoin purchase. Additionally, Vitor Constancio, former ECB Vice-President said via Twitter “it was not disclosed when Tesla had made this investment” and that as “bitcoin kept going up, the Tesla investment has appreciated”. “The SEC will look into this” his tweet concluded.

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