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This week in Bitcoin price: Feb 3-8

Published on February 8, 2021

The big picture

Earlier today, Bitcoin hit a new all-time high of nearly $45,000 following news that Tesla had invested $1.5 billion in the cryptocurrency and would at some point begin accepting it as a form of payment. 

Tesla’s move, which was revealed in an SEC filing, came in the wake of founder Elon Musk briefly changing his Twitter bio to “#bitcoin” during last week’s memestock frenzy (after which Bitcoin prices spiked amid speculation that one or more of his companies might be making a Bitcoin purchase).

The electric-vehicle giant is the latest — and most prominent — publicly traded company to disclose that it has added Bitcoin to its balance books to create, as the SEC report noted, “more flexibility to further diversify and maximize returns on our cash.” Tesla followed similar moves made last year by payment processor Square and business analytics firm MicroStrategy. 

Also in this week’s report: for the entire current bull run, social media interest has lagged behind Bitcoin’s last peak era. So have continued corporate moves — and record-breaking prices — finally bridged the gap?  

Key points

One of the major drivers of Bitcoin’s current bull run has been its growing acceptance as a corporate treasury asset. Today, Microstrategy’s $1.1 billion 2020 investment is worth nearly $3 billion. Square’s initial $50 million investment is currently worth over $200 million.

  • As another indication of growing institutional acceptance, fund manager Bill Miller revealed plans to invest up to 15 percent of the Miller Opportunity Trust’s $2.7 billion in the Grayscale Bitcoin Trust. 

  • MicroStrategy hosted a “Bitcoin for Corporations” event that outlined the challenges, logistics, and considerations for corporate investments in Bitcoin. According to the company, 1,400 representatives from various firms attended the event. 

  • So why is this happening? A prevailing theory notes that government stimulus in the wake of COVID has driven U.S. dollars in circulation up by at least 25% over the past year. "The way inflation works is the more of an asset you have the less valuable it is,” said Brian Books, former acting U.S. Comptroller of the Currency. “That would explain why a lot of institutions want to have Bitcoin sitting in their treasury.” (Brooks is also a former Coinbase chief legal officer.)

Spotlight: Search and social media interest

Despite new all-time high prices, Google Search interest for Bitcoin in the U.S. remains relatively low compared to 2017’s bull run. But that doesn’t mean that there isn’t substantial activity in key online communities (and that retail traders aren’t still a crucial part of the Bitcoin ecosystem). In the wake of last week’s Gamestop fever, in which Reddit users rocked traditional markets only to find themselves locked out of trading certain stocks on popular platforms, crypto communities on Reddit have seen an unprecedented wave of new subscribers. With the Tesla news and late-breaking all-time-high prices, it will be interesting to see if mainstream attention will finally swing fully back to Bitcoin — and what impact that attention might have. 

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