The corporate world is taking notice. Last week Tesla, an electric-car maker, announced in a public filing that it had bought $1.5bn worth of bitcoin and would soon begin accepting the cryptocurrency as payment (Elon Musk, the company’s mischievous boss, has tweeted his support for the currency and its imitators, including Dogecoin, a joke digital coin). Mastercard, a payments firm, said it would start facilitating payments in a limited number of cryptocurrencies this year. And BNY Mellon, America’s oldest bank, said it would hold and exchange cryptocurrencies on behalf of its institutional clients.
This crypto craze is also attracting the attention of politicians and celebrities. In a bid to attract tech firms leaving San Francisco and New York, Francis Suarez, the mayor of Miami, has proposed that his city’s government be allowed to pay its workers in bitcoin. Jack Dorsey, the boss of Twitter, and Jay Z, a rapper-turned-music-mogul, are donating 500 bitcoin (currently worth around $23m) to a blind trust intended to develop the cryptocurrency’s use in India and Africa.
Cryptocurrencies are easier to invest in than ever before. PayPal, an online payments company, now accepts digital currencies, while a growing number of brokerages are letting retail investors buy bitcoin and other crypto assets on their platforms. But the biggest reason why the cryptocurrency is on the rise is increased interest from institutional investors. Unlike the 2017 boom, which was propelled by retail traders, analysts reckon the current upswing is being caused by purchases by professional investors.
The combined market capitalization of all cryptocurrencies hit $1trn in January according to CoinDesk, a news service; on February 15th it broke the $1.5trn mark for the first time, ranking it alongside Alphabet, Google’s parent company. The recent climb in prices has created an astronomical amount of wealth for those who bought into the currency early on. Cameron and Tyler Winklevoss, the twins best known for a legal battle with Mark Zuckerberg over the founding of Facebook, are now likely to be worth more than $1bn each.
Assuming that he is a real person, the biggest winner from crypto’s climb is almost certainly Satoshi Nakamoto, bitcoin’s pseudonymous inventor. He is thought to own more than 1m bitcoin—currently worth around $50bn.