Cryptocurrency trading surged to record levels in February as the price of bitcoin swung wildly following Tesla’s $1.5 billion investment, new data show.
Crypto trading volumes soared 17 percent to more than $2.7 trillion last month as the electric-car maker and other major companies started to embrace digital currency, according to a Friday report from industry data provider CryptoCompare.
The jump came as the price of bitcoin — the world’s biggest and oldest cryptocurrency — hit a record high above $58,000 on Feb. 21 thanks in part to bullish comments from billionaire Tesla CEO Elon Musk.
But crypto trading was heaviest two days later on Feb. 23, when bitcoin went through a “sharp correction” and plunged to around $43,000 after Musk tweeted that the price looked “high,” according to CryptoCompare.
Nearly $160 billion in cryptocurrency changed hands that day, marking a new all-time record for trading volume, the firm’s report says.
The data points to both the growing popularity of cryptocurrency and the big price swings that could hamper its widespread use as an investment asset or payment method.
The trading spike coincided with signs that cryptocurrency was nevertheless gaining traction among big corporations and institutional investors. Mastercard and BNY Mellon announced last month that they would support crypto payments and investments, and CME Group launched futures trading for Ether, the second-largest cryptocurrency by market value.
The bulk of the elevated trading flowed through the biggest crypto exchanges, which saw their volumes surge 35 percent to $2.4 trillion, according to CryptoCompare.
Smaller exchanges, on the other hand, saw their volume shrink by 36 percent to $381 billion, the firm’s data show.