Bitcoin hit the $58K level for the first time on Sunday, gaining 2.75% during the session and closing at the $57,376 level. During February, the crypto asset has gained about 69.80%, posting gains for the fifth consecutive month and sparking fears of a speculative bubble.
Bitcoin has been gaining ground since Elon Musk added the hashtag #bitcoin to his Twitter bio in late January. Later, his company Tesla announced its decision to acquire $1.5 billion worth of Bitcoin and its plan to accept payments in it. Other companies, (such as Master Card, Twitch and Coca-Cola), have joined since then in backing the cryptocurrency.
Right after his company made around $1 billion in profits due to Bitcoin's gains and after Bitcoin's value surpassed $1 trillion, Elon Musk commented that Bitcoin's price "seems high". Musk also likened Bitcoin to fiat currencies, though highlighting that it was a better asset to hold given the negative interest rate of some currencies.
Like Musk, some analysts are enthusiastic about the current momentum, disregarding ongoing concerns about regulation.
“The regulatory issues have been around for a long time, we’ve been dispelling them for a long time. At this point, our belief is: Bitcoin is not a question of if, but when,” commented a Bitcoin strategist. “We certainly believe, you know, the best time to invest in Bitcoin was yesterday — the second-best time to allocate is today.”
Nevertheless, some warn against allocating an important part of the balance sheet to Bitcoin, given its high volatility.
Some high-profile politicians have been calling for Bitcoin regulations, such as U.S. Treasury Secretary Janet Yellen, who said that is important to ensure that cryptocurrencies are not being used to finance illicit activities.
By 10:52 GMT, Bitcoin fell by 4.54% against the US dollar to the $54,949.0 level.