TOKYO, Feb. 9 (Reuters) – Bitcoin boosted earnings to a record high on Tuesday as the aftermath of Tesla Inc’s investment in the cryptocurrency would make investors believe it would become a common asset class for corporations and money managers.
Bitcoin has doubled in more than two months as institutional investors search for alternative wealth stores and retailers move the wave. Monday’s jump after Tesla’s announcement was its biggest daily rise in more than three years.
It traded at a record high of $ 48,216 late in the Asian afternoon on Tuesday. Competitive cryptocurrency ethereum reached a record high of $ 1,784.85 early in the morning.
Shares in companies that offer trading platforms for bitcoin and the technology to “exploit” the cryptocurrency have risen in China, South Korea and Australia, and large computer chips such as SK Hynix have also risen.
The US dollar has fallen against most currencies.
Analysts reckon 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 of a larger shift as companies and large investment houses follow small traders’ assets.
“While you can now buy a Tesla with bitcoin, I would not suggest doing so,” Michael Bucella, a partner at crypto-investment firm BlockTower, told CNBC. “We are in a position where these are the earliest stages of an institutional and corporate community bitcoin award.”
Bitcoin has already risen 62% this year, in addition to a 300% rise last year as investors look for alternatives to the greenback due to the US interest rate of 0%.
Central bankers and regulators, especially in China, are also beginning to issue their own digital currencies for daily use, in a major breach of the conventional operation of world finance.
“It seems clear to us that digital currencies will be an increasing part of the financial architecture, and that portfolios may be moving forward,” Ben Powell, APAC’s investment strategist at BlackRock’s Investment Institute, told CNBC.
“Not only is there news in the US about the bitcoin situation, but in China we have a deployment of China’s digital currency with so – called ‘red packets’.”
Tesla boss Elon Musk has long been a fan of cryptocurrencies – he discussed them online – but Tesla’s hard currency investment was a surprise that put a rocket under the sector.
Even dogecoin, a joke crypto-currency with a dog as its symbol, uploaded its value turbo after Musk mentioned it on Twitter. According to CoinMarketCap, it jumped 13% in the past day.
China’s Feitian Technologies Co. Ltd, which makes technology for digital payments, rose 4.47% on Tuesday.
Beijing will issue 10 million yuan ($ 1.55 million) worth of digital currency to residents that can be used during the Chinese New Year holiday from Thursday, local media reported.
Chinese are also expected to send billions of yuan to each other over the weekend via chat programs such as WeChat – digital versions of traditional ‘red packet’ envelopes filled with cash. ($ 1 = 6.4493 Chinese yuan renminbi) (Written by Stanley White)