(rejected) Bitcoin Hits $46,000 For First Time as Analysts Bet Other S&P 500 Companies Will Follow Tesla’s Lead

Editor's note: Main source is from Coindesk.

Bitcoin price has reached another all-time high, hitting highs $46,000 for the first time in history. Currently, the leading cryptocurrency is trading at $46,841, a rise of almost 18% in the past 24 hours, according to data from CoinMarketCap.

The development comes hours after Elon Musk’s Tesla, the revolutionary electronic US automaker, announced on Monday, 8 February that it has bought $1.5 billion in Bitcoin. The electric vehicle manufacturer joins the increasing list of publicly traded companies converting some of their cash reserves into Bitcoin.  

Bitcoin jumped to $46,46,841, after crossing the $45,000 threshold for the first time. Meanwhile, Bitcoin’s latest rally has propelled the prices of other cryptocurrencies to rally higher including Ethereum, Litecoin, and Algorand.

Tesla joins the rising numbers of S&P 500 companies including the business intelligence software provider MicroStrategy and the payments processor Square that converted their balance sheet into Bitcoin. Based on the current price of Bitcoin, it is clear that more institutions would continue to embrace the largest cryptocurrency.

Joel Kruger, the currency strategist at LMAX Digital cryptocurrency exchange, said: “We think this is just the start to a much wider adoption from household institutional names, finally ready to make the crossover into the crypto space.”

Mati Greenspan, CEO and founder of Quantum Economics, stated:

“Mainstream adoption [for crypto] is happening right before our eyes, and it is taking place before the entire world.”

Glassnode blockchain analytics company commented that as more firms such as Tesla are purchasing and holding Bitcoin for the long term, the cryptocurrency’s liquid supply continues to decrease. Glassnode further revealed that currently about 78 percent of issued Bitcoin are lost or being hodled. This leaves less than 4 million Bitcoins to be shared among future market entrants, such as large institutions like Square, PayPal.

Why Wall Street Investors Turning to Bitcoin

As the new, big investors have accelerated their buying spree, the increased demand has helped fuel Bitcoin’s rally to an all-time high. The price resurgence in 2020 has been partly driven by Wall Street investors publicly backing bitcoin.

Prominent investors like Stanley Druckenmiller, Bill Miler, and Paul Tudor II have put money in Bitcoin as they consider it as a potential hedge against inflation, as central banks across the globe and the Federal Reserve pump trillions of dollars into the economy in response to the Covid-19 crisis. Large financial firms such as Fidelity and PayPal have also made moves in the crypto asset to add the ability for their clients to purchase Bitcoin and thus has opened up the market to thousands and millions of new buyers.

Furthermore, the likes of MicroStrategy, Square, and Mass Mutual have converted their balance sheet into Bitcoin as part of the long-term capital allocation strategy that focuses on maximizing the value of their shareholders in the long run.