Bitcoin nears $1 trillion value as Crypto jump tops other assets
The total market value of cryptocurrencies surpassed $1 trillion for the first time Thursday amid a frenzied and volatile rally in Bitcoin to yet another record.
Cryptocurrencies hit the milestone after a fivefold climb in market value in the past year, data from tracker CoinGecko shows. Strategists have cited demand from speculative retail traders, trend-following quant funds, the rich and even institutional investors as among the reasons for the surge.
The largest token has added more than $415 billion of value in 2021 to about $956 billion, data compiled by Bloomberg show. The Bloomberg Galaxy Crypto Index, which includes Bitcoin and four other coins, has more than doubled.
The “long Bitcoin” trade is seen as among the most crowded in the world alongside technology exposure and dollar shorts, according to the February edition of Bank of America’s global fund manager survey. Bitcoin rose as much as 5% on Thursday to touch a high of $37,802 and has more than quadrupled in the past year, according to a composite of prices compiled by Bloomberg. It accounts for about two-thirds of cryptocurrency market value, followed by Ether at about 13%, according to CoinGecko data.
Active Bitcoin accounts are nearing their all-time high levels of late 2017, according to researcher Flipside Crypto- possibly a sign that some holders are planning to sell. Fewer than 2 per cent of accounts hold 95% of Bitcoin supply, so a few big trades can impact prices. The last big Bitcoin boom began imploding in late 2017.
Some traders pointed to JPMorgan Chase & Co’s long-term Bitcoin price forecast of $146,000 as possibly fueling the rally. Others said sentiment was boosted by a U.S. regulatory update that allows a class of less volatile coins to be used by banks for payments. Bitcoin traded at around $51,300 as of 1:30 p.m. on Friday in Hong Kong after quintupling in the past year. The crypto index’s performance towers over overstocks, gold, commodities and bonds in 2021.