Bitcoin Surges as Major Companies Adopt Cryptocurrency

So far this week, Bitcoin has continued with its gaining streak, rising by 5.14%.

CryptocurrencyYesterday, Bitcoin gained 2.68% against the US dollar, hitting an all-time high and trading above the $50,000 level for the first time.

Many attribute this surge to the fact that some big companies, such as Tesla and MasterCard, decided to push for this asset. Tesla bought around $1.5 billion worth of Bitcoin (which is almost 8% of its reserves) and announced its plan to accept payments in the cryptocurrency, while MasterCard announced that it is planning to provide support for some cryptocurrencies, though not all of them, since hundreds of digital assets need to adjust their compliance measures. Other companies, like Twitter, seem to be considering such a move, though nothing concrete has been announced.

About this phenomenon, Federal Reserve Bank of St. Louis President James Bullard commented that the adoption of Bitcoin is not a problem for the US dollar as the world's reserve currency. Nevertheless, he highlighted that they are concerned by privately issued currency, as America already experienced a period when banks issued their own brands of dollars. 

“You don’t want to go to a non-uniform currency where you’re walking into Starbucks and maybe you’ll pay with Ethereum, maybe you’ll pay with Ripple, maybe you’ll pay with Bitcoin, maybe you’ll pay with a dollar. That isn’t how we do this. We have a uniform currency that came in at the Civil War time,” commented Bullard. 

Bullard cited the case of the Japanese yen and the euro, claiming that despite being considered safe havens by investors, they still have not replaced the dollar as the world's reserve currency. He likened Bitcoin to gold, highlighting that he doesn't think there will be any change in the future.

Bitcoin has been suffering from high volatility lately, though making some significant gains in the last couple of weeks. Last week, this cryptocurrency gained 20.17% against the US dollar, climbing for the third consecutive week. So far this week, Bitcoin has continued with its gaining streak, rising by 5.14%.

The cryptocurrency gained popularity after Elon Musk added the hashtag #bitcoin to his Twitter bio in late January. This called the attention of regulators, some of whom think that the misuse of this cryptocurrency is on the rise. Other cryptocurrencies have also gained traction lately, such as Dogecoin, a parody cryptocurrency that has also been promoted by Musk in the past. 

Other investors have expressed their skepticism about the asset. Nassim Taleb, a famous options trader who is well known for coining the term "Black Swan", commented that Bitcoin fails as a currency, and announced his decision to get rid of the asset.

By 6:17 GMT, Bitcoin gained by 1.99% against the US dollar, hitting the $50,165.9 level.

Ibeth Rivero

Ibeth contributes daily market commentary in both English and Spanish (both of which she speaks fluently) and she also manages the DailyForex mobile app to ensure that traders around the world are getting important market updates in real time.