Bitcoin soars to new highs and oil jumps as outlook brightens, with US stocks set to slip as markets await fresh stimulus

Bitcoin soars to new highs and oil jumps as outlook brightens, with US stocks set to slip as markets await fresh stimulus
Tesla has sent the Bitcoin price to a record highNurPhoto/Getty Images
  • Tesla's investment announcement sent Bitcoin soaring above $48,000 for the first time.
  • Stock markets have rallied sharply in February to new highs, but paused on Tuesday.
  • Oil rose to its highest level in 13 months, as investors bet on strong demand in 2021.

Bitcoin jumped to a record high on Tuesday and oil continued to rally, while US stocks were on track to ease back after scaling new heights on Monday.

The bitcoin price soared to $48,000 for the first time after electric car maker Tesla said it was investing in the digital token, before slipping back slightly.

Meanwhile, Dow Jones futures were down 0.09%, S&P 500 futures were off by 0.08% and Nasdaq futures were 0.11% lower by 4.20am ET.
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Overnight in Asia, China's CSI 300 stock index jumped 2.19% to close at its highest level in 13 years as investors bet on a continued rapid economic recovery. Japan's Nikkei 225 rose 0.4%.

Read More: Wall Street's resident IPO expert shares the strategy behind her ETF that returned 107% last year - plus 3 risks to the current IPO boom and 5 offerings to watch this year

In Europe, the Stoxx 600 was 0.23% lower in early trading while the UK's FTSE 100 had slipped 0.05%.
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While equities investors took a break, oil rallied to a 13-month high, lifted by a growing expectation among investors for a strong pick-up in demand in 2021.

Brent crude futures were up 0.18% on Tuesday morning to $60.81 per barrel, its highest level since before the coronavirus pandemic in January 2020. WTI crude was up 0.28% to $58.15 a barrel. "Oil extended its recent gains yesterday as a combination of hopes for a US stimulus package combined with ongoing mild supply concerns supported prices," said David Madden, market analyst at trading platform CMC Markets.
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"Last week, US oil inventories fell to an 11-month low, which could be interpreted as rising demand for oil. [The OPEC+ group of oil-producing countries] maintained their outputs plans, which wasn't exactly a surprise."

Democrats in Congress are pushing ahead with President Joe Biden's $1.9 trillion stimulus plan this week, and hope to pass it with, or without, Republican consent.

Bitcoin's remarkable rally continued, driven by Elon Musk's company Tesla announcing that it had invested $1.5 billion in the cryptocurrency and may start accepting it as payment.
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The bitcoin price rose to just above $48,000 for the first time on Tuesday in European trading. It was last up 19.7% to $46,743 on the Bitstamp exchange.

Read More: Goldman Sachs says the reflation trade is on and these 5 market dynamics that could 'shift materially' as price pressures build

Tesla's announcement "was the catalyst that disrupted the crypto-haters' base case that there really isn't institutional interest behind this move in cryptos," said Edward Moya, senior market analyst at currency platform Oanda.
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"All eyes are for bitcoin to hit $50,000 at some point in the near future, and it could go much further if the dollar resumes its slide."

The dollar index fell 0.39% to 90.58 on Tuesday morning, with analysts saying the pivot into stocks that stand to benefit from stronger growth - known as the "reflation trade" - had knocked the greenback. A disappointing jobs report on Friday has also weighed on the currency.

Sophia Ng, analyst at MUFG, said: "Reflation trades are becoming a major theme for global markets in view of fiscal stimulus and the increased pace of COVID-19 vaccination worldwide, which brings support to stock markets and commodity prices."
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