The bitcoin price jumped above $50,000 for the first time on Tuesday morning, as interest from Wall Street institutions added momentum to a remarkable rally that has seen the cryptocurrency soar around 70% this year.
Bitcoin rose to $50,645 on the Coinbase exchange, taking year-to-date gains to 72%, before slipping back slightly. The bitcoin price (BTC) was up around 3% to $49,384 at 8.30am ET.
Elon Musk’s Tesla triggered the latest climb higher on February 8, when it revealed it had bought $1.5 billion of the cryptocurrency in January. It also said it intended to start accepting the coin as payment.
Since then, interest from major financial firms including BNY Mellon and Mastercard has helped support the rally by adding legitimacy to the asset.
“Growing corporate support for the crypto makes this a very different market to what it was in 2017,” said Neil Wilson, chief market analyst at trading platform Markets.com, referencing that year’s volatility.
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BNY Mellon plans to issue, hold, and transfer clients’ bitcoin, it announced on February 11. It would be the first global bank to provide an integrated digital asset service to its customers.
Mastercard will begin allowing customers to use “select cryptocurrencies” on its network later this year, it announced on February 10.
More recently, Bloomberg reported that a $150 billion investment arm of Morgan Stanley is considering betting on bitcoin. Morgan Stanley declined to comment.
And JPMorgan co-president Daniel Pinto said he is convinced more banks will start getting involved thanks to client demand. He told CNBC on Friday: “The demand isn’t there yet, but I’m sure it will be at some point.”
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The interest from big players has supported the narrative that institutional investors are increasingly interested in bitcoin. This belief has been a key driver of the astounding rally in the bitcoin price from below $4,000 in March 2020 to inches away from $50,000.
It has also helped other cryptocurrencies such as ether, the coin on the Ethereum network. The ether price was roughly flat at $1,793 on Tuesday morning, after hitting a record high of above $1,870 over the weekend.
“It’s been a fantastic couple of weeks for the cryptocurrency space, with numerous big names making bitcoin related announcements,” said Craig Erlam, senior market analyst at currency platform Oanda.
He said the question was now “how much further it can go and how fast.”