Bitcoin topped $50,000 for the first time Tuesday, doubling in value in less than two months.
The digital currency traded as high as $50,584.84, up about 5% for the day and more than 74% for the year, according to CoinDesk. The total market value of bitcoin in circulation rose to $940 billion. Bitcoin later receded from its high, recently trading near $48,962.
The $50,000 level is an “emotional level for people in the space,” said Brian Melville, head of strategy at trading firm Cumberland. But it is also a simple result of supply and demand, he added.
From August through December, about 150,000 new bitcoins were minted, he estimated. The firm calculated that about 359,000 bitcoins were bought in the same period, and that imbalance has continued in 2021. “It’s a really important metric to watch,” he added.
That buying demand has brought not only a price rally, but growing acceptance and recognition of an asset that was once an object of derision for regulators and lawmakers.
Read More: Bitcoin Trades Above $50,000 for First Time