Bitcoin reached another record, coming ever closer to $50,000, as the world’s largest cryptocurrency extends its rally.
According to a composite of prices compiled by Bloomberg, the token climbed as much as 3.6% to $49,913 in Asian trading Tuesday.
Bitcoin’s volatile, fivefold advance over the past year towers above the returns from more traditional investments like stocks, gold and commodities.
Bitcoin’s ascent has been geared by the widening adoption of the cryptocurrency, most notably Tesla Inc.’s disclosure this month of a $1.5 billion purchase.
Yet a debate continues about whether the token has any intrinsic value at all, amid warnings that investors could be left with big losses because cryptocurrencies remain highly speculative.
A flurry of recent announcements indicates that Bitcoin is winning more mainstream attention, after Tesla’s purchase pushed cryptocurrencies onto the agenda of corporate treasurers worldwide.
For instance, an investment unit of Morgan Stanley is considering whether to bet on Bitcoin, according to people with knowledge of the matter. In Canada, officials approved the first North American Bitcoin exchange-traded fund.
BNY Mellon has said it’s formed a new team that’s developing a custody and administration platform for traditional and digital assets. Mastercard Inc. plans to allow cardholders to transact in certain cryptocurrencies on its network.
Digital tokens had already caught the attention of hedge fund moguls including Alan Howard and Paul Tudor Jones. On one disputed narrative, Bitcoin is a kind of digital bullion that provides a store of value as well as a hedge for risks such as faster inflation. That’s in part because it’s designed to have a fixed supply of 21 million coins.
Amid the hype, there continue to be warnings that cryptocurrencies are prone to wild price swings, deployed for illicit transactions and exposed to tightening regulations — storing up a lot of risk.