Photographer: Chris Ratcliffe / Bloomberg
Photographer: Chris Ratcliffe / Bloomberg
The total market value of cryptocurrencies was exceeded $ 1 trillion for the first time on Thursday amid a frantic and volatile rally on Bitcoin to another record.
Cryptocurrencies reached the milestone after a fivefold increase in market value last year, according to data from tracker CoinGecko. Strategies have cited demand from speculative retailers, trend-based funds, wealthy and even institutional investors, among the reasons for the increase.
Bitcoin rose as much as 6% on Thursday to a high of $ 38,169 and has quadrupled over the past year, according to a price set compiled by Bloomberg. It accounts for about two-thirds of the market value of cryptocurrencies, followed by Ether at around 13%, according to CoinGecko data.
Digital currencies are jumping into a world flooded with fiscal and monetary stimulus, although some commentators fear an inevitable receiving and others question the integrity of cryptographic markets. Proponents of Bitcoin argue that it offers coverage against the weakness of the dollar and the risk of faster inflation, a bit like gold, while critics denounce the intellectual soundness of comparing the two assets.
“The more people perceive that their assets, particularly their liquid assets, such as fiat currencies, are deteriorating in value, the more they will look for alternatives,” said Geoffrey Morphy, president of the Canadian mining cryptography company. Bitfarms Ltd.
According to researcher Flipside Crypto, Bitcoin’s active accounts are approaching historic highs in late 2017, possibly a signal that some holders have predicted to sell. Less than 2% of accounts have 95% of the Bitcoin supply, so some major transactions can affect prices. The last big Bitcoin boom started to explode in late 2017.
Some traders pointed to the long duration of JPMorgan Chase & Co. The forecast of the Bitcoin price of $ 146,000 as a possible feeder for the concentration. Others said sentiment was fueled by a U.S. regulatory update that allows banks to use a less volatile class of currencies for payments.
– With the assistance of Lynn Thomasson and Eric Lam
(Updates with market movements.)