GUANGZHOU, China – Bitcoin hit $ 37,700 on Thursday, a new record high. This allowed the total value of the entire cryptocurrency market to rise above $ 1 trillion for the first time.
According to Coindesk, the digital coin hit an all-time high of $ 37,739.08 around 1:44 p.m. Singapore time, just hours after blowing past $ 36,000.
Bitcoin was above 5% from the day before around 2:42 p.m. Singapore time.
The cryptocurrency has increased 29% since early 2021 and has increased over 380% in the past 12 months.
The value of the entire cryptocurrency market, made up of Bitcoin and other digital coins like ether and tether, topped $ 1 trillion for the first time early Thursday, according to Coinmarketcap.
Bitcoin’s resurgence has been attributed to a number of factors, including more purchases from large institutional investors. High-profile investors like Paul Tudor Jones, for example, bought Bitcoin.
Many Bitcoin bulls say the cryptocurrency is like “digital gold”, a potential safe haven and a hedge against inflation. In a recently released research report, JPMorgan said Bitcoin could hit $ 146,000 in the long run as it competes with gold as an “alternative” currency. However, the investment bank’s strategists noted that Bitcoin would have to become much less volatile to reach that price. Bitcoin is known for wild price fluctuations.
The idea of Bitcoin as a hedge against inflation has continued to gain momentum as governments around the world launch extensive fiscal stimulus programs. Analysts argue that this could lead to a spike in inflation.
“This latest upward trend in January will attract the attention of asset managers looking to move more of their assets to crypto as they look to alternative investments like cryptocurrency or gold to hedge against inflation and geopolitical risks,” said Simons Chen, executive director for Investing and trading in cryptocurrency financial services company Babel Finance, told CNBC.
“A large number of retail investors have also recently joined the race as they fear they will miss the opportunity to profit easily and quickly from the recent bull run,” he added.
Some Bitcoin critics – like David Rosenberg, economist and strategist at Rosenberg Research – have called Bitcoin a bubble.
“The parabolic movement of Bitcoin in such a short time, I would say for security reasons, is highly abnormal,” Rosenberg told CNBC earlier this month.