Bitcoin’s credibility boost

Bitcoin’s credibility boost

Bitcoin came close to breaking the $50,000 barrier at the weekend and our Big Read on the cryptocurrency looks at its 350 per cent gain in the past 12 months.

Driving the price in the past week has been the Tesla revelation that it had spent $1.5bn on bitcoin. Then BNY Mellon “” America's oldest bank “” on Thursday said it would start holding and transferring cryptocurrencies for asset management clients, while Mastercard announced it would soon support "select cryptocurrencies“ on its network, allowing more stores to accept them as payment.

But analysts and investors say the main driver of bitcoin's recent rise has been fears that central bank stimulus to dampen the economic damage of Covid-19 will ultimately ignite inflation. The hope of its proponents is that bitcoin is now becoming mainstream. "We are potentially at the birth of a new asset class,“ argues Duncan MacInnes, a fund manager at Ruffer, a traditional, conservative UK investment group that raised eyebrows when it placed a $600m bet on bitcoin last year.

As for its opponents, Jonathan Ford argues in Inside Business that Elon Musk being a cheerleader for bitcoin is idiocy in terms of the environmental impact of producing it. Bitcoin miners are