Bitcoin extended gains on Tuesday to a record high as the afterglow of Tesla Inc’s investment in the cryptocurrency had investors reckoning it would become a mainstream asset class for both corporates and money managers.
Bitcoin has more than doubled over two months as institutional investors search for alternative wealth stores and retail traders ride the wave. Monday’s leap after Tesla’s announcement was its largest daily rise in more than three years.
It traded at a record high of $48,216 late in the Asian afternoon on Tuesday. Rival cryptocurrency ethereum had made a record high of $1,784.85 in the early morning.
Shares of companies that provide trading platforms for bitcoin and the technology to “mine” the cryptocurrency surged in China, South Korea, and Australia, and big computer chip making companies such as SK Hynix also rose.
The U.S. dollar slumped against most currencies.
Analysts figure Tesla’s announcement that it had bought $1.5 billion in bitcoin and that it would take the cryptocurrency as payment for cars is part a of a larger shift as companies and big investment houses follow small traders into the asset.
-REUTERS