The attack was planned by the group, who armed themselves with weapons and used a level of violence that can only suggest they intended to kill him
Bitcoin hit a market capitalisation of $1 trillion as it rose to yet another record high on Friday, countering analyst warnings that it is an “economic side show” and a poor hedge against a fall in stock prices.
The world’s most popular cryptocurrency jumped to an all-time high of $56,399.99, posting a weekly gain of 14 per cent.
It has surged nearly 70 per cent so far this month and was last up 8 per cent at $55,664.
Bitcoin’s gains have been fuelled by signs it is gaining acceptance among mainstream investors and companies, from Tesla Inc and Mastercard Inc to BNY Mellon.
All digital coins combined have a market cap of around $1.7 trillion.
“If you really believe there’s a store of value in bitcoin, then there’s still a lot of upside,” said John Wu, president of AVA Labs, an open-source platform for creating financial applications using blockchain technology.
“If you look at gold, it has a market cap of $9 or $10 trillion. Even if bitcoin gets to half of gold’s market cap, that’s still growth of 4X, or $200,000. So I don’t know when it stops rising,” he added.
The next milestone will be overtaking Alphabet Inc, currently valued at $1.431 trillion, said Jacob Skaaning, portfolio manager at crypto hedge fund ARK36.
“There will likely be some big fluctuations along the way, but I’m still very bullish and I believe the uptrend will continue for the time being,” he added.
Still, many analysts and investors remain skeptical of the patchily regulated, highly volatile digital asset, which is little used for commerce.
Analysts at JP Morgan said bitcoin’s current prices were well above estimates of fair value. Mainstream adoption increases bitcoin’s correlation with cyclical assets, which rise and fall with economic changes, in turn reducing benefits of diversifying into crypto, the investment bank said in a memo.
“Crypto assets continue to rank as the poorest hedge for major drawdowns in equities, with questionable diversification benefits at prices so far above production costs, while correlations with cyclical assets are rising as crypto ownership is mainstreamed,” JP Morgan said.
Bitcoin is an “economic side show,” it added, calling innovation in financial technology and the growth of digital platforms into credit and payments “the real financial transformational story of the COVID-19 era.”
Other investors this week said bitcoin’s volatility presents a hurdle for it to become a widespread means of payment.
On Thursday, Tesla boss Elon Musk - whose tweets have fueled bitcoin’s rally - said owning the digital coin was only a little better than holding cash. He also defended Tesla’s recent purchase of $1.5 billion of bitcoin, which ignited mainstream interest in the digital currency.
Bitcoin proponents argue the cryptocurrency is “digital gold” that can hedge against the risk of inflation sparked by massive central bank and government stimulus packages designed to counter Covid-19.
Yet bitcoin would need to rise to $146,000 in the long-term for its market cap to equal the total private-sector investment in gold via exchange-traded funds or bars and coins, according to JP Morgan.
Rival cryptocurrency ether also hit an all-time peak of $1,974.99 on Friday, and was last up 1.2 per cent at $1,961.32, after its futures were launched on the Chicago Mercantile Exchange.
Bitcoin’s surge extended to crypto-related stocks as well, such as Silvergate Capital Corp, which was up 8.2 per cent, cryptocurrency miner Riot Blockchain, 13.5 per cent higher, and Marathon Patent Group, up 7.3 per cent.
Shares of Overstock.com, an online retailer and blockchain tech investor, gained 4.1 per cent; while MicroStrategy Inc, a bitcoin buyer and business intelligence software firm, advanced 4.1 per cent.
-waheedabbas@khaleejtimes.com
The attack was planned by the group, who armed themselves with weapons and used a level of violence that can only suggest they intended to kill him
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