10 Jan Bitcoin up 12% and for the first time exceeded $40,000, resulting in the market value of the cryptocurrency exceeding $1 trillion.
Bitcoin price rises 12% on Thursday to a record high of $40,394.87. This helped for the first time in history to raise the total value of the cryptocurrency market to over $1 trillion.
Bitcoin, which has grown by almost 400% over the past 12 months, has generated huge investor interest in recent weeks.
The driving forces are the desire of investors to look for an alternative asset that will be decentralized and not tied to any central bank, whose actions can reduce the value of the traditional currency, as was the case in the case of the US dollar with zero Federal Reserve, interest rate policy and economic stimulus trillions of dollars over the past year.
“As buying interest continues to drive the market, any downturns or setbacks will be seen as another opportunity to enter a market that is currently moving steadily upward,” said DailyFX strategist Nick Cowley.
“As always with cryptocurrency, be careful, especially given the volatility at its current extreme,” he added.
With a market capitalization of over $1 trillion, cryptocurrencies are now worth nearly half as much as Apple, the world’s most valuable company. They are also more valuable than the entire Swiss economy, home to some of the world’s largest financial institutions and the largest gold vaults.
“Bitcoin continues to cut trees, figuratively speaking, climbing to a new record,” said Michael Hewson, chief strategist at CMC Markets in a daily note.
The increased transparency fueled by regulation and growing market depth has helped cryptocurrencies shake off their old reputation as an asset class, an abundance of speculation, questionable market practices, and fraud.
Payment companies such as PayPal and Square allow their users to trade cryptocurrencies, and an increasing number of fintech companies outside the US are showing growing interest from their customer base.
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