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Global Cryptocurrency Market Value Surges Past $1 Trillion With Bitcoin Hitting $38,000

Global Cryptocurrency Market Value Surges Past $1 Trillion With Bitcoin Hitting $38,000
The total value of the entire crypto currency market of the world has now crossed over the $1 trillion mark for the first time with the driver being the increase in the value of bitcoin which went past the $38,000 mark to reach a new record high on Thursday.
According to data from Coin Metrics just a few hours after blowing past the $37,000 level,, this virtual currency hit an all-time high of $38,080 at around 1:45 p.m. ET.
The value of bitcoin on Thursday was 7 per cent more than the previous day. With the first six days of this year, the value of the crypto currency has shot up about 30 per cent while it has recorded an almost 370 per cent growth in its value over the last year.
According to data from Coinmarketcap, with the growth in bitcoin’s value, there was consequent growth in the values of other smaller crypto currencies and the total value of all of the crypto currencies of the world surpassed $1 trillion for the first time on Thursday.  
Bitcoin is by far the most dominant cryptocurrency, with a market value of over $700 billion.
According to analysts and experts, the stupendous growth in the value of bitcoin has been pinned on a number of factors which includes large institutional investors making more purchases of the virtual currency. The digital currency has also been regularly bought in recent times by high-profile investors like Paul Tudor Jones, for example.
The cryptocurrency is akin to “digital gold,” according to many bitcoin bulls, which is like a safe haven asset and a hedge against inflation.
As bitcoin competes with gold as an “alternative” currency, it can hit $146,000 in the long term, JPMorgan said in a recent research note. However to reach that value, bitcoin would have to become substantially less volatile, cautioned the investment bank’s strategists. This virtual currency is known for its wild price swings.
As governments around the world have embarked on large-scale fiscal stimulus programs to cushion the economic impact of the pandemic, the notion of bitcoin being a possible hedge against inflation has continued to t gain popularity. But according to analysts, this could cause a spike in inflation.
“This latest bull run in January is sure to attract the asset managers’ attention to diversify even more of their assets to crypto as they are keen on finding alternative investments, such as cryptocurrency or gold, to hedge inflation and geopolitical risks,” said Simons Chen, executive director of investment and trading at cryptocurrency financial services firm Babel Finance.
“A large number of retail investors have also joined the race recently as they fear to miss out on opportunities to make easy, quick gain from the latest bull run,” he added.
But bitcoin has been dubbed as a bubble by some of the critics of the virtual currency including David Rosenberg, economist and strategist at Rosenberg Research.
“The parabolic move in bitcoin in such a short time period, I would say for any security, is highly abnormal,” Rosenberg said earlier this month.

Christopher J. Mitchell

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