Yesterday, Bitcoin gained 0.48% against the US dollar, hitting the $54,331.0 level at the end of the session and breaking a two-day losing streak. Other cryptocurrencies did not follow suit, such as Ethereum which continued losing ground, falling by 0.85% and closing the session at the $1,668.77 level. Dogecoin followed, which fell by 2.72% against the US dollar and closed at the $0.053423 level.
Recently, Elon Musk said that Tesla will accept Bitcoin as payment, making official an announcement he made some time ago that pushed up enthusiasm for crypto in the markets.
"You can now buy a Tesla with Bitcoin," he tweeted, adding that Tesla is intending to manage Bitcoin payments using their own software and operate Bitcoin nodes directly.
Increasing institutional adoption, as well as fears for inflation, have been favoring Bitcoin's performance, even though there are still important investors and politicians that have expressed their doubts about them.
On Wall Street, opinions about the recent cryptocurrency boom are divided. On one hand, Citigroup said that Bitcoin may turn into the most preferred currency for global trade, while Morgan Stanley claimed that cryptocurrencies are about to become an investable asset class. On the other hand, Commerzbank commented that Bitcoin is a purely speculative asset that doesn't deserve coverage from analysts, while analysts at Bank of America said that Bitcoin is simply not suitable as a hedge against inflation.
Even government officials, such as Treasury Secretary Janet Yellen, have expressed their doubts, while some states are considering restricting cryptocurrency trading, holding and production. In any case, this doesn't seem to be affecting the markets, as some consider that a ban would just make it harder to buy cryptocurrencies.
Some analysts believe that Bitcoin's bull market is coming to an end, now that the incentives to realize profits are stronger than ever.
"As price increases, the incentive to sell and realize these profits also increases," commented an important crypto analyst. "As a result, we typically see HODLers spending their coins as bull markets progress.”
By 12:50 GMT, Bitcoin rose by 3.17% against the US dollar to the $56,843.0 level.