Bitcoin has once again smashed records and broken through the $50,000 mark.
After a sharp rejection at $42,000 earlier this year, many analysts questioned whether Bitcoin’s current rally had ended. However, after 30 days of floundering in the low-to-mid $30k level, it once again broke $40k and has continued upward since.
Naturally, Bitcoin was heavily rejected at around $50k as sell orders kicked in and the price fell sharply before finding support at $49,300.
Analysts attribute the continued growth to large corporations jumping on the crypto bandwagon and investing in Bitcoin. Following big news last year of PayPal’s accepting cryptocurrency, major financial firms like Mastercard and BNY Mellon have also joined the party.
However, a more likely reason for Bitcoin’s rise is simply the increased scarcity that’s hardcoded into its design. As outlined in Plan B’s popular Bitcoin Stock-to-Flow model, you can clearly see how the price follows a set cycle defined by the halvening of the mining reward every 210,000 blocks.
A Trillion Dollar Market Cap
The new rally has sent it streaking ahead of many massive tech company market caps, including that of Facebook and Tesla. Now valued at around $930 billion, Bitcoin will soon break the $1 trillion mark if this rally continues.
Tesla recently invested $1.5 billion into Bitcoin, instigating the very rally that sent it flying past the companies own valuation. Bitcoin has gained over $100 billion in value over the past few weeks, whereas Tesla has remained relatively stable at around $783 billion.
Tesla CEO Elon Musk has been extremely vocal lately about his enthusiasm for Bitcoin and also Dogecoin (DOGE), another cryptocurrency invented by Jackson Palmer as a joke. As a result, the old question of whether Musk is the real creator of Bitcoin has resurfaced, although he has always denied the claims.