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Bitcoin price hits new record of $50,000

The digital coin’s value has ballooned in response to support from the heads of major institutions

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Photo (c) Busakorn Pongparnit - Getty Images
Bitcoin hit a new all-time high of $50,000 on Tuesday. Its extended rally comes amid growing interest from executives of large companies like Tesla and Mastercard. 

Last week, Tesla disclosed that it purchased $1.5 billion worth of bitcoin and said that customers will be able to pay for Tesla products using the cryptocurrency. Mastercard also said it will allow cardholders to use some cryptocurrencies on its network.

Although the digital token has been notoriously volatile in years past, Bitcoin supporters say its latest rally appears to be different. In late 2017, the coin’s value rose to nearly $20,000, only to shed more than 80 percent of its value the following year. 

Experts say the 2017-2018 rollercoaster ride was primarily fueled by retail speculation. Over the past year, however, Bitcoin has garnered support from a growing legion of investors who view it as a more stable asset now. 

“I think that starting in March of 2020, you saw institutions start to arrive, and I think in 2021 you’re going to see that trend continue,” Michael Saylor, CEO of enterprise software firm MicroStrategy, told CNBC. “There’re enthusiasts for bitcoin as a medium of exchange, … but I personally believe that the compelling use case is a store of value.”

Although Bitcoin has surged to a new record high and has seen growing interest from institutions, experts say investors should be aware that price volatility remains a risk. 

“It’s important to remember that Bitcoin never moves up in a straight line,” said Antoni Trenchev, managing partner and co-founder of Nexo in London, one of the biggest crypto lenders. “Short-term volatility is very much a feature of this bull market and investors should prepare accordingly.”

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