GUANGZHOU, China – Bitcoin broke through $ 37,700 and hit a new record Thursday, pushing the total value of the entire cryptocurrency market above $ 1 trillion for the first time.
The digital coin hit a record high of $ 37,739.08 around 1:44 pm in Singapore, just a few hours after it blown past $ 36,000, according to data from Coindesk.
Bitcoin was more than 5% compared to the day before around 2:42 pm in Singapore.
The cryptocurrency is up about 29% since the beginning of 2021 and is up more than 380% in the last 12 months.
Meanwhile, the value of the entire cryptocurrency market, which consists of bitcoin and other digital coins such as ether and tether, surpassed $ 1 trillion for the first time on Thursday, according to Coinmarketcap data.
Bitcoin’s resurgence is attributed to a number of factors, including increased purchases from major institutional investors. For example, high-profile investors such as Paul Tudor Jones have bought bitcoin.
Many bitcoin bulls say the cryptocurrency is akin to ‘digital gold’, a potential safe haven and 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. The investment bank strategists noted that bitcoin would need to become significantly less volatile to reach this price. Bitcoin is known for wild price swings.
The idea of bitcoin as a hedge against inflation has continued to gain traction as governments around the world embark on large-scale fiscal stimulus programs. Analysts argue this could trigger a spike in inflation.
“This latest bull run in January will certainly attract the attention of asset managers to diversify even more of their assets into crypto as they are eager to find alternative investments, such as cryptocurrency or gold, to hedge inflation and geopolitical risks,” said Simons. Chen, executive director of investments and trading at cryptocurrency financial services firm Babel Finance, told CNBC.
“A large number of retail investors have also joined the race recently, fearing missing out on opportunities to make a profit easily and quickly from the latest bull run,” he added.
But some bitcoin critics – like 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 for the sake of certainty, is highly abnormal,” Rosenberg told CNBC earlier this month.