Bitcoin Hits New All-Time High; Breaches $50,000 For The First Time Ever

Extending its relentless rally, Bitcoin price crosses the $50,000 mark for the first time ever on Tuesday. The most popular and expensive cryptocurrency hit $50,110 on the San Francisco-based exchange Coinbase and $50,240 on the Singapore-based crypto derivatives exchange Bybit, before declining.

Bitcoin gained over 30% over the last month and skyrocketed with 400% in one year's time amid COVID-19 induced uncertainties and increased adoption by institutional investors.

Reasons for the price rally

Institutional adoption has been one of the main reasons for the increase in Bitcoin's price since 2020 when some American companies like Square and Microstrategy bought bitcoins. Reports of an investment unit under Morgan Stanley exploring stake in Bitcoins also fueled popularity.

In October 2020, the global digital payments company Paypal announced that it would be launching cryptocurrency buying and selling features on its platform.

The most recent event to induce interest in Bitcoin or cryptocurrencies was Tesla Inc's announcement on buying bitcoins worth $1.5 billion in January 2021 after the company updated its investment policy to invest in digital assets. The company also said that it will start accepting Bitcoin as payment for its product and services in the future, a significant move towards accepting cryptocurrency for retail purchases.

In the same week, Mastercard Inc. said that it will begin allowing merchants to accept some cryptocurrencies on its network later this year, embracing virtual currencies. Bank of New York Mellon Corp. also made a similar announcement on 11 February.