Cryptocurrency analysts predict bitcoin could continue to rise after it hit a new all-time high on Monday.
Bitcoin rose in value by 14 per cent in the space of just a few minutes to nearly $44,000 following Tesla's announcement that it was investing $1.5 billion into the cryptocurrency.
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The world's most valuable car maker also announced that it planned to start accepting bitcoin payments for its electric vehicles.
"If there were any doubters as to the mainstream acceptance of bitcoin, this surely must mark the end of any scepticism. Multiple other brands already accept bitcoin as payment, and we would imagine that, in time, other major companies will follow Tesla's example," Simon Peters, an analyst at the online investment platform eToro, told The Independent.
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"The world is moving online more and more and bitcoin sits at the heart of online transactions, and with this kind of endorsement from a multi-billion dollar company, it's likely the price will hit $50,000 by the end of the week."
Separate analysis of trading data from London-based cryptocurrency exchange CEX.IO resulted in a similarly bullish forecast from the company's executive director, Konstantin Anissimov.
"Everything goes to the fact that the upward trend in bitcoin will be continued by a new wave of growth, which in February may raise this to $50,000. But we consider $48,051 as the closest target mark," he said.
"This is an approximate figure based on operational technical analysis. Therefore, if Tesla is followed by a new wave of investing in bitcoin from the corporate segment, this level can be overcome very quickly."
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Bitcoin's price has already been boosted by significant institutional investment over the last 11 months, which has seen Wall Street funds diversify their portfolios into cryptocurrency amid global economic uncertainty brought about by the Covid-19 pandemic.
Bitcoin was trading below $5,000 as recently as March, but its rise to successive new record highs has been a bumpy one.
After reaching above $40,000 for the first time last month, bitcoin crashed all the way to $30,000 before rallying once again.
Bitcoin's volatile history in pictures
Despite this volatility, some crypto experts have likened bitcoin to a form of "digital gold" due to its finite supply. A research note from an economist at the Bank of Singapore in January suggested bitcoin could replace gold as a store of value in the future.
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With gains of close to 300 per cent in 2020, bitcoin outperformed the combined gains of gold (23.4 per cent) and the Dow Jones stock market (6.8 per cent) by a factor of 10.
It is the third great price rally in bitcoin's history – the most recent took place in 2017 – and some analysts warn that it could go the same way as the previous two bull runs.
The 2017 high of close to $20,000 was followed by lows of around $3,000, while a similar pattern was seen in 2013 when a new high of $1,000 was followed by prices close to