GUANGZHOU, China – Bitcoin fell $ 37,700 to a new record high on Thursday, helping raise the total value of the entire cryptocurrency market by more than $ 1 trillion for the first time.
The digital currency hit an all-time high of $ 37,739.08 around 1:44 p.m., Singapore time, just hours after it passed $ 36,000, according to Coindesk data.
Bitcoin was over 5% from a day earlier, around 14:42, Singapore time.
The cryptocurrency has grown by about 29% since the beginning of 2021 and in the last 12 months it has grown by over 380%.
Meanwhile, the value of the entire cryptocurrency market, which is made up of bitcoin and other digital currencies such as ether and tether, topped $ 1 trillion for the first time early Thursday, according to Coinmarketcap.
The renaissance of Bitcoin has been attributed to a number of factors, including more buying from large institutional investors. High-profile investors such as Paul Tudor Jones, for example, bought bitcoin.
Many bitcoin bulls say that the cryptocurrency is similar to “digital gold”, an active potential for safe haven and a hedge against inflation. In a recent research note, JPMorgan said bitcoin could reach $ 146,000 in the long run as it competes with gold as an “alternative” currency. Investment bank strategists have noted that bitcoin should become substantially less volatile to reach this price. Bitcoin is known for wild price fluctuations.
The idea of bitcoin as a hedge against inflation has continued to gain steam as governments around the world engage in large-scale fiscal stimulus programs. Analysts say this could lead to higher inflation.
“This latest race in January will certainly attract the attention of asset managers to further diversify their assets into encryption, as they are eager to find alternative investments, such as cryptocurrency or gold, to cover inflation and geopolitical risks.” Simons Chen, executive director of investment and trading at cryptocurrency financial services firm Babel Finance, told CNBC.
“A large number of retail investors have joined the race recently because they are afraid of losing the opportunities to win easily and quickly from the last bull race,” he added.
But some bitcoin critics – such as David Rosenberg, an economist and strategist at Rosenberg Research – have called bitcoin a bubble.
“The parabolic movement in bitcoin in such a short period of time, I would say that for any security, is extremely abnormal,” Rosenberg told CNBC earlier this month.