The overall market cap of cryptocurrencies crossed $1 trillion for the first time on Thursday in a frenzied and volatile Bitcoin rally to another high.
Cryptocurrencies surpassed the milestone following a five-fold rise in market valuation in the past year, CoinGecko tracker data reveals. As among the reasons for the surge, strategists have cited demand from bullish retail traders, trend-following quant funds, wealthy and even institutional investors.
According to a composite of prices compiled by Bloomberg, Bitcoin rose as much as 4 percent on Thursday to top $37,000 and has more than quadrupled in the past year. It accounts for around two-thirds of the market valuation of cryptocurrencies, followed by about 14% for Ether. So far this year, Ether is 62 percent up.
In a world full of fiscal and monetary stimulus, digital coins are hopping, even though some analysts predict an inevitable bust and others question the intrinsic integrity of crypto-markets. Bitcoin supporters claim that it is a hedge against the vulnerability of the dollar and the danger of higher inflation, a little like gold, although critics reject the analytical soundness of comparing the two assets.
Most crypto analysts expect 2021 for bitcoin and altcoins. For their optimism, they cite the institutional interest for BTC, the ubiquity of crypto on-ramps and the natural ebb and flow of four-year market cycles.
