Bitcoin Sets a New All-Time High, Eclipses $64,000 On Wednesday

Bitcoin Sets a New All-Time High, Eclipses $64,000 On Wednesday

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Key Takeaways

• Bitcoin races above $64,500 as the rally continues for a second day
• The crypto asset is up over 450% for the past six months

Bitcoin surged on Tuesday after a week-long dry spell that essentially contained the price in the upper $50,000 levels. Yesterday, the world’s largest digital asset attracted renewed buying that boosted the price to a record above $63,500. The 6% jump on the day sent its market value to nearly $1.2tn.

While the whole market is now worth $2.2tn, bitcoin’s market share is diminishing, currently standing at 53.6%, down from 70% in January. This is generally viewed as a good sign for the overall health of the market because it allows other assets to grow and share in the rally alongside bitcoin.

Bitcoin’s decreasing market dominance is not stopping it from sprinting to higher grounds. On Wednesday, the price surged above the $64,000 milestone, currently floating around $64,500, thus making a new all-time high.

Since the latest bottom on Apr 8, the digital token has been steadily climbing and is now in its seventh straight day of gains. For April, initially, the price of bitcoin wobbled as buyers could not propel it above $60,000. In the second week of April, however, the price started to gain traction and is now up over 9% for the month.

Crypto Skepticism Among Central Banks

Bitcoin has more than quadrupled in the last six months with gains of over 450%. During that time, bitcoin gathered strong mainstream support that helped popularize the crypto space and give it the needed credibility for it to be considered an emerging market and an asset class on its own. Now, bitcoin is on the balance sheet of large corporations like Tesla, MicroStrategy, and Square. It is also the hottest and most demanded investment asset by institutional investors and is the newest addition to the wallets of PayPal, Visa, and MasterCard.

Bitcoin kicked off the year strong with Tesla onboarding in early February when it announced it has added $1.5bn of bitcoin to its balance sheet. Later, in March, the EV maker allowed US clients to purchase electric cars by using bitcoin as a means of payment. The company stated that it will retain the payment in bitcoin, without converting it to a sovereign currency like the US dollar.

Investment banks such as Goldman Sachs, Morgan Stanley, and JPMorgan are seeing increased demand by their clients to allow bitcoin purchases. Goldman recently restarted its cryptocurrency trading desk which deals with bitcoin futures for clients. The firm is also set to allow investing in bitcoin for its wealthy clients with over $25mn of funds held by the bank. Similarly, Morgan Stanley has added bitcoin exposure to 12 of its institutional funds. And JPMorgan, whose CEO labeled Bitcoin a “fraud” in 2017, projected in January that bitcoin could rise to $146,000. Moreover, JPMorgan strategists have advised clients to allocate 1% of their assets to bitcoin as a way to diversify their portfolio.

However, central banks continue to frown over the cryptocurrency boom. Federal Reserve Chairman Jerome Powell said crypto assets are more for speculation than for payments. The Bank of England is also skeptical due to the inherent volatility of the crypto market.