Bitcoin surges to record high as Mastercard and Uber show cryptocurrency interest

Bitcoin has surged in value in recent weeks

Credit: Reuters

Bitcoin jumped to a record high on Thursday after Mastercard and Uber joined a growing wave of companies set to accept cryptocurrencies as payment.

The digital coin rose as much as 7.4pc to $48,635, surpassing the all-time high reached Monday after Tesla announced it would hold $1.5bn of the cryptocurrency on its balance sheet. 

“The crypto-asset world is bursting into the realms of traditional finance at a staggering pace,” said Simon Peters, an analyst at investment platform eToro.

US payments firm Mastercard said it would offer “select” cryptocurrencies as options to its cardholders by the end of 2021. It said it was also “actively engaging” with central banks on their own plans for digital currencies.

The company has already partnered with some of the biggest cryptocurrency firms such as Wirex and BitPay, but Mastercard previously required digital currencies to be converted into fiat currencies before processing payments for transactions on its network.

Raj Dhamodharan, Mastercard’s blockchain head, said: “This is a big change that will require a lot of work. We will be very thoughtful about which assets we support based on our principles for digital currencies, which focus on consumer protections and compliance.”

“Our change to supporting digital assets directly will allow many more merchants to accept crypto — an ability that’s currently limited by proprietary methods unique to each digital asset.”

"Just like we accept all kinds of local currency we are going to look at cryptocurrency and or #bitcoin in terms of currency to transact. That's good for business, that's good for our riders and our eaters," says @dkhos. "We are just not going to do it as part of a promotion." pic.twitter.com/2OSamy3yBV

— Squawk Box (@SquawkCNBC) February 11, 2021

Meanwhile, Dara Khosrowshahi, Uber’s chief executive, told CNBC: “We are going to look at cryptocurrency and or Bitcoin in terms of currency for transactions.” 

However, he dismissed the ride-hailing company could also buy a stash of cryptocurrency, saying: “We are not in the speculation business.”

It comes as America’s oldest bank, BNY Mellon, also said it would allow Bitcoin payments and transfers.

Wall Street Bets, the popular Reddit forum at the center of the retail investor frenzy, is talking about cryptocurrencies as well. The unverified Twitter account “Wallstreetbets mod” posted a call to buy Bitcoin and marijuana stocks.

Digital coin proponents believe that the mainstream adoption of cryptocurrency is imminent. Mike Novogratz, of cryptocurrency investment firm Galaxy Digital, called the Mastercard news “huge”. “Crypto adoption is here,” he said.

Mati Greenspan, founder of analyst firm Quantum Economics, said: "Mainstream adoption is already upon us.”

Interest in cryptocurrencies has soared after Musk said he was a supporter of Bitcoin on a social audio app Clubhouse and made multiple references on Twitter to Dogecoin, a joke digital coin. On Monday, Tesla revealed that it has invested $1.5bn in Bitcoin and said it plans to accept it as payment for cars in the future.