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Bitcoin hits new high as Mastercard and BNY Mellon support cryptocurrency

Tom Belger
·Finance and policy reporter
·3-min read
<p>Mastercard will let merchants accept payments in crypto this yea. Photo: STRF/Star Max/IPx 2021</p>

Mastercard will let merchants accept payments in crypto this yea. Photo: STRF/Star Max/IPx 2021

Bitcoin (BTC-USD) touched new highs on Thursday, as both Mastercard and BNY Mellon signalled their support for the cryptocurrency.

After surging past the $48,000 (£34,681) mark to a record high, it pared back some gains but was still trading more than 5% higher at $47,901.41 at around 3.30pm in London (10.30am eastern time in the US).

It came as BNY Mellon, the oldest bank in the US, confirmed it had created a new unit for clients to hold, transfer and issue digital assets.

Roman Regelman, head of asset servicing and digital at BNY Mellon, highlighted "growing client demand for digital assets" as well as "improving regulatory clarity." It marked a "tremendous opportunity for us to extend our current service offerings to this emerging field," he added.

Mastercard had announced only a day earlier it would start directly supporting some cryptocurrencies on its network. "Doing this work will create a lot more possibilities for shoppers and merchants," said its head of blockchain, digital assets and partnerships Raj Dhamodharan in a statement.

READ MORE: Tesla buys $1.5 billion worth of bitcoin, says it may accept it for payment in the 'near future'

"Whatever your opinions on cryptocurrencies — from a dyed-in-wool fanatic to utter sceptic — the fact remains that these digital assets are becoming a more important part of the payments world.

"We are seeing this fact play out on the Mastercard network, with people using cards to buy crypto assets, especially during bitcoin's recent surge in value. We are also seeing users increasingly take advantage of crypto cards to access these assets and convert them to traditional currencies for spending."

<p>Bitcoin hit new record highs on 11 February 2021. Chart: Yahoo Finance UK</p>

Bitcoin hit new record highs on 11 February 2021. Chart: Yahoo Finance UK

Bitcoin had already been rallying this week after electric car company Tesla (TSLA) revealed it had purchased $1.5bn worth of bitcoin, and expects to accept the cryptocurrency for its products in the future.

"The corporate support just keeps on coming," said Neil Wilson, chief market analyst at CMC Markets UK. "It’s a big deal since BNY is the first big national custodial bank to offer custody services for crypto assets."

WATCH: What is a bitcoin?

He added: "The question is: the more suits take over this space, what happens to regulation? More corporate adoption-more regulatory oversight. Whilst it was fine to let Bitcoin be when it was used for money laundering and drug running, it’s another story when the likes of BNY are offering custodial services."

Fawad Razaqzada, market analyst with ThinkMarkets, said it was important more and more companies began accepting Bitcoin as a form of payment. "Ultimately digital currencies are meant to be medium of exchange as well as store of value."

But he added: "People like things that are rising rapidly in value, and this bullish momentum has drawn many speculators who like to ride the uptrend for hopefully some decent profit."

WATCH: What are the risks of investing in cryptocurrency?