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The largest cryptocurrency, bitcoin, surged to a record above $43,000 on Monday on the news that Tesla invested $1.5 billion in the digital asset and expects to start accepting the cryptocurrency as payment.
The crypto was trading more than eight percent higher, at $42,581 as of 13:00 GMT, after briefly surpassing $40,000 on Saturday. It is now up 15 percent compared to seven days ago and has closed in on an all-time high reached in early January.
“There will be pullbacks, maybe even to retest the top of the flag as support,” popular crypto trader Scott Melker said on Twitter, adding: “But technically this is a confirmed breakout that should take $BTC to 63K eventually. Disclaimer – patterns rarely reach their targets, but the rules are the rules.”
Bitcoin enthusiasts point to the digital asset as a hedge against inflation and store of value as concerns are rising that US President Joe Biden’s $1.9 trillion virus relief package may risk overheating the economy.
Bitcoin’s free float, a measure of how many tokens are available to trade, has dropped to 13 percent of supply, which is the lowest since 2014, according to Chainanalysis. “This suggests that Bitcoin available to buy remains scarce despite record prices,” Philip Gradwell, chief economist at the blockchain research firm, was quoted as saying by Bloomberg.
Last week, hedge fund legend Bill Miller revealed plans of a $400 million bitcoin investment, saying he will increase his bitcoin exposure by plowing 15 percent of one of his portfolios to buy Grayscale BitcoinTrust shares.
“If retail and institutional interest continues to grow over the next month, bitcoin could target the $45,000 level,” said Edward Moya, a senior market analyst at forex broker Oanda.
Analysts say another reason behind cryptocurrencies’ growth could be celebrities attracting attention to dogecoin. Over the weekend, billionaire Elon Musk, rapper Snoop Dogg and KISS bassist Gene Simmons sent several Dogecoin tweets and memes, pushing prices of the crypto to a record high.