GUANGZHOU, China – Bitcoin broke $ 37,700 to break a new record on Thursday, helping to raise the total value of the entire cryptocurrency market above $ 1 trillion for the first time.
The digital currency hit a high of $ 37,739.08 around 1:44 pm Singapore time, just hours after exceeding $ 36,000, according to data from Coindesk.
Bitcoin was up 5% from the previous day, at around 2:42 pm, Singapore time.
Cryptocurrency has increased by about 29% since the beginning of 2021 and in the last 12 months it has increased by more than 380%.
Meanwhile, the value of the entire cryptocurrency market, which is made up of bitcoin and other digital currencies like ether and tether, surpassed $ 1 trillion for the first time on Thursday morning, according to data from Coinmarketcap.
Bitcoin’s resurgence has been attributed to a number of factors, including more purchases from major institutional investors. High-profile investors like Paul Tudor Jones, for example, have been buying bitcoin.
Many bitcoin experts say that cryptocurrency is similar to “digital gold”, a potential safe haven and protection against inflation. In a recent research note, JPMorgan said that bitcoin could reach $ 146,000 in the long run, as it competes with gold as an “alternative” currency. Investment bank strategists noted that bitcoin would have to become substantially less volatile to reach that price. Bitcoin is known for large price swings.
The idea of bitcoin as a hedge against inflation continued to gain momentum as governments around the world embarked on large-scale fiscal stimulus programs. Analysts argue that this could cause an increase in inflation.
“This latest bullish run in January will certainly attract the attention of asset managers to further diversify their assets for cryptography, as they are interested in finding alternative investments, such as cryptocurrency or gold, to protect inflation and geopolitical risks.” , Simons Chen, executive director of investment and trade at cryptocurrency financial services firm Babel Finance, told CNBC.
“A large number of retail investors have also joined the race recently, as they fear they will miss opportunities to make quick and easy gains from the last bull run,” he added.
But some critics of bitcoin – like David Rosenberg, 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 for any security, is highly abnormal,” Rosenberg told CNBC earlier this month.