Bitcoin’s price roared back Wednesday after a sharp sell-off, climbing above $50,000 again as Square announced it had purchased $170 million worth of the cryptocurrency.
At 4 a.m. ET, the world’s most valuable digital coin surged 7.5% to a price of $50,683, according to data from Coin Metrics. The cryptocurrency climbed as high as $51,369 a few hours earlier.
Other cryptocurrencies also got a boost, with ether and XRP climbing 11.3% and 7.4% respectively. So-called altcoins, or alternative cryptocurrencies, often climb in times of strength for bitcoin.
On Tuesday, Square announced it had bought 3,318 bitcoins at an average price of around $51,235. The fintech company, which is run by Twitter CEO Jack Dorsey, said bitcoin now represents about 5% of its total assets.
It’s not the first time Square has invested in bitcoin — the firm bought $50 million worth of the digital currency last year. Dorsey is one of bitcoin’s most well-known proponents, having once said he believes it will eventually become the “single currency” of the internet.
Bitcoin had a rough start to the week, slumping from a record high of $58,356 Sunday to as low as $45,501 on Tuesday. It’s not unusual for bitcoin to undergo wild bouts of volatility — the digital token infamously climbed to nearly $20,000 in 2017 before entering a bear market the following year.
Bitcoin is still up more than 70% year-to-date and over 400% in the last 12 months. The crypto asset’s stunning rally has garnered the attention of everyone from Tesla CEO Elon Musk to U.S. Treasury Secretary Janet Yellen.
Earlier this week, Yellen called bitcoin an “extremely inefficient” means of payment and warned about its use in illicit activity.
“It is a highly speculative asset and … I think people should be aware it can be extremely volatile,” the former Federal Reserve chair said at a New York Times DealBook conference. “I do worry about potential losses that investors can suffer.”
Musk, meanwhile, has come out as a believer in bitcoin. His electric car company recently invested $1.5 billion of corporate cash into the cryptocurrency, and the billionaire tech entrepreneur said he thinks it could be “on the verge of getting broad acceptance” among conventional financial services firms.
But even Musk has suggested bitcoin’s current price levels could be unsustainable, tweeting over the weekend that he thinks the prices of bitcoin and rival token ether “seem high.”
