Bitcoin has a market cap of $ 1 trillion
Bitcoin has a market cap of $ 1 trillion

Amid warnings from analysts that Bitcoin's protective effect on the stock market is weak, Bitcoin reached an all-time high on Friday with a market value of $ 1 trillion.

The world's most popular cryptocurrency reached an all-time high of $ 56,399.99, up 14% weekly.

So far this month, Bitcoin has appreciated nearly 70%, while the latest increase was 8%, to $ 55,864.

There is evidence that Bitcoin's rise was due to widespread adoption by investors and companies such as Tesla and Mastercard.

The total market value of all digital currencies is around $ 1.7 trillion.

AVA Labs President John Wu (John Wu) is an open source platform that uses blockchain technology to build financial applications. If you think Bitcoin has a store of value, he said, there is still plenty of room for growth.

He added, if we look at gold, we find that its market value is 9 or 10 trillion dollars. Although Bitcoin is at half the market value of gold, it is still four times the increase, i.e. $ 200,000. So I don't know when this will stop rising.

Cryptocurrency ARK36 hedge fund portfolio manager Jacob Skanen said the next step would be to bypass Alphabet, which is currently valued at $ 1.431 trillion.

He added: There might be a lot of volatility but I'm still very optimistic and I think the bullish trend will continue for the time being.

However, many analysts and investors still have doubts about highly volatile and unregulated digital assets that are rarely used in transactions.

Analysts at investment bank JP Morgan said: The current price of Bitcoin is much higher than the fair value estimate.

The investment banking services company said in a report: The widespread use of crypto technology has increased Bitcoin's relevance to cyclical assets, and cyclical assets will either rise or fall with economic changes, reducing the diversity of cryptocurrency returns.

Note added: Crypto assets remain the primary hedging tool for large stock withdrawals. When the price is much higher than the cost of production, the multiple benefits are questionable, and as ownership of digital currency increases in popularity, the relationship with cyclical assets increases.

Other investors said this week: Bitcoin's volatility is an obstacle to making it a popular payment method.

A tweet from Elon Musk, founder of electric car maker Tesla, led to the rise of Bitcoin, and he said owning a digital currency is better than keeping money.

Musk also defended Tesla's recent $ 1.5 billion Bitcoin purchase and sparked interest in the digital currency.

Supporters of Bitcoin believe that this cryptocurrency is digital gold that can shield against the inflation risks of the massive stimulus package launched by the central bank and the government in response to the effects of the Coronavirus.

However, in the long term, Bitcoin should rise to $ 146,000 for its market value equal to the total private sector gold investment through ETFs or gold and coins.

Competing cryptocurrency Ethereum (Ethereum) hit an all-time high in 1974 last Friday; after starting a futures contract on the Chicago Mercantile Exchange, it recently rose 1.2% until 1961.

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