NEW YORK / LONDON (Reuters) – Bitcoin it reached a market capitalization of $ 1 trillion, as it reached another record on Friday, countering analysts’ warnings that it is an “economic show” and poor hedging against falling stock prices.
The most popular cryptocurrency in the world reached an all-time high of over $ 54,000, setting the price for a weekly jump of over 11%. It has risen about 64% so far this month and rose 5.5% last time to $ 54,405.
BitcoinEarnings were fueled by signs of gaining acceptance among investors and mass companies, from Tesla and Mastercard to BNY Mellon.
All digital currencies combined have a market cap of about $ 1.7 trillion.
“If you really believe that there is a store of value bitcoin“Then there’s still a lot of the top,” said John Wu, president of AVA Labs, an open-source platform for creating financial applications using blockchain technology.
“If you look at gold, it has a market capacity of 9 or 10 trillion dollars. Even if bitcoin reaches half of the gold market ceiling, an increase of another 4X or $ 200,000. So, I don’t know when it will stop growing “, he added.
However, many analysts and investors remain skeptical of the partially regulated and highly volatile regulated digital asset, which is little used for trading.
JP Morgan analysts said bitcoinCurrent prices were well above fair value estimates. General adoption is increasing bitcoinThe correlation with cyclical assets, which increase and decrease with economic changes, in turn reducing the benefits of diversification in encryption, the investment bank said in a statement.
“Cryptographic assets continue to rank as the weakest hedge for major share reductions, with questionable benefits of price diversification so far above production costs, while correlations with cyclical assets increase as cryptographic property is integrated,” he said. said JP Morgan.
Bitcoin it is an “economic show”, he added, calling innovation in financial technology and the growth of digital platforms in loans and payments “the true story of the financial transformation of the COVID-19 era”.
Other investors said this week bitcoinVolatility is an obstacle to it becoming a widespread means of payment.
On Thursday, Tesla boss Elon Musk – whose tweets fueled bitcoinrally – said that holding digital currency was only slightly better than holding cash. He also defended Tesla’s recent $ 1.5 billion acquisition bitcoin, which ignited the general interest in digital currency.
Reuters Cryptocurrencies have risen sharply since March lows.
Bitcoin Proponents argue that cryptocurrency is “digital gold” that can cover the risk of inflation posed by massive packages of central and government bank incentives designed to counter COVID-19.
Yet bitcoin it should grow to $ 146,000 in the long run so that its market capitalization equals the private sector’s total investment in gold through exchange traded funds or bars and coins, according to JP Morgan.
The rival ether of cryptocurrencies traded down 0.3% to $ 1,934.67, still close to a record $ 1,951 reached earlier on Friday. It was driven by growing institutional interest after its future was launched on the Chicago Mercantile Exchange.
(Reporting by Gertrude Chavez-Dreyfuss in New York and Tom Wilson in London; Editing by Dan Grebler)
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