Crypto Market Value Exceeds $ 1 Trillion As Bitcoin Rises To $ 38,000

Photographer: Chris Ratcliffe / Bloomberg

The total market value of cryptocurrencies has exceeded $ 1 trillion for the first time on Thursday amid a frenzied and volatile Bitcoin rally to another record high.

Cryptocurrencies have crossed the mark after a five-fold increase in market value over the past year, according to data from the CoinGecko tracker. Strategists cited demand from speculative retail traders, trend-setting quantitative funds, wealthy and even institutional investors as the reasons for the surge.

Bitcoin rose 6% on Thursday to peak at $ 38,169 and more than quadrupled last year, according to a price composite compiled by Bloomberg. It accounts for around two-thirds of the cryptocurrency’s market value, followed by Ether at around 13%, according to CoinGecko The data.

Digital coins are jumping in a world awash with fiscal and monetary stimulus, even as some commentators fear inevitable collapse and others question the basis integrity of crypto markets. Supporters of Bitcoin claim that it offers a hedge against a weak dollar and the risk of faster inflation, much like gold, while critics denounce the intellectual soundness of the comparison of the two assets.

“The more people feel that their assets, especially their liquid assets like fiat currencies, are eroding, the more they will look for alternatives,” said Geoffrey Morphy, president of the Canadian crypto mining company. Bitfarms Ltd.

Active Bitcoin accounts are nearing their all-time high of late 2017, according to researcher Flipside Crypto – perhaps a sign that some holders are considering sale. Less than 2% of accounts hold 95% of Bitcoin’s supply, so a few large exchanges can impact prices. The last big Bitcoin boom started to implode in late 2017.

Some traders have pointed out the long term of JPMorgan Chase & Co. Bitcoin price prediction of $ 146,000 as potentially fueling the rally. Others said sentiment was bolstered by an update to U.S. regulations that allows a less volatile class of coins to be used by banks for payments.

– With the help of Lynn Thomasson and Eric Lam

(Updates with market movements.)