The most popular cryptocurrency, bitcoin, has been breaking its own records on almost a daily basis this week, in a seemingly unstoppable rally that pushed its market valuation close to $1 trillion.
The value of the token jumped by over two percent on Friday, breaking an all-time high reached just two days ago, and setting a new record price above $53,000, according to CoinMarketCap data. Thanks to the recent gains, its market cap surpassed the $990-billion level during Friday’s trading.
To put that in context, bitcoin’s market value is bigger than that of either Tesla or Facebook, and almost twice as large as Warren Buffett’s Berkshire Hathaway. In 2021 alone, bitcoin added over $400 billion to its market cap, outperforming most traditional assets. And it has surged by more than 60 percent so far this month, driven by signs it is winning broader institutional acceptance.
Earlier in February, Tesla revealed its $1.5 billion investment into bitcoin, while Mastercard said it would soon allow transactions in some cryptocurrencies. Last week, America’s oldest bank, BNY Mellon, said it would transfer and issue bitcoin for its institutional clients.
However, skeptics still say bitcoin’s rally is unsustainable and warn that the crypto market is another bubble ready to pop. JP Morgan called the token an “economic sideshow,” noting that mainstream adoption actually reduces the benefits of diversifying into bitcoin.
“Crypto assets continue to rank as the poorest hedge for major drawdowns in equities, with questionable diversification benefits at prices so far above production costs, while correlations with cyclical assets are rising as crypto ownership is mainstreamed,” Reuters reported, citing the bank’s memo.
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