Cryptocurrency Bitcoin Market Capitalisation Hits $1 Trillion, Soars To All-Time High Record Crossing $57,000

Bitcoin achieved a historic milestone on Tuesday, February 16, after it breached the $50,000 mark for the first time ever in a dizzying rally, especially after Billionaire Elon Musk’s electric vehicle company Tesla Inc announced a $1.5 billion investment in the cryptocurrency. The surge in prices resulted in a huge stride for bitcoin towards gaining mainstream acceptance from investors. (Also Read: Bitcoin Crosses $50,000 In Historic Win, Gains Further Mainstream Acceptance: 10 Points )

The digital currency was able to sustain its historic $ 50,000 win as the world’s largest publicly traded business intelligence company, MicroStrategy announced that it will borrow $600 million to buy more bitcoin. It plans to issue $ 600 million in convertible notes in order to fund its bitcoin purchase. (Also Read: Bitcoin Stays Above $50,000 As MicroStrategy Seeks $600 Million To Raise Stakes )

All digital coins combined have a market capitalisation of around $ 1.7 trillion. On January 7, 2021, the total market value of all cryptocurrencies surged above $ 1 trillion for the first time backed by bitcoin’s rally of crossing the $40,000 mark then. Bitcoin accounts for around 69 per cent of the total market cap, followed by Ethereum with a 13 per cent share. (Also Read: Cryptocurrency Market Cap Touches $1 Trillion: All You Need To Know )

Rival cryptocurrency ethereum, the world’s second-largest cryptocurrency with a total value of 220 billion dollars, also more than doubled this year. Ether hit an all-time peak of $1,974.99 on Friday, after its futures were launched on the Chicago Mercantile Exchange, according to news agency Reuters.

The recent enthusiasm from bigger institutions such as Tesla Inc, MicroStrategy, Bank of NY Mellon, PayPal has also attracted interest from investors across the globe towards bitcoin. Still, many analysts remain skeptical of the patchily regulated, highly volatile digital asset, which is little used for commerce. Bitcoin is still not recognsied as legal by many central banks (Also Read: Bitcoin Surges To All-Time High Of $48,481 After BNY Mellon Welcomes Digital Currency)

Tesla Inc’s CEO Elon Musk, whose tweets have fueled bitcoin’s dizzying rally, stated that 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. MicroStrategy is also a major bitcoin corporate backer. (Also Read: Bitcoin Shoots Higher To $48,216 In Dizzying Rally After Tesla’s Investment:10 Points )

Analysts at JP Morgan said that bitcoin’s current prices were well above estimates of fair value. Mainstream adoption increases bitcoin’s correlation with the cyclical assets, which rise and fall with economic changes, in turn reducing the benefits of diversifying into cryptocurrency. While other investors this week said bitcoin’s volatility presents a hurdle for it to become a widespread means of payment.

Bitcoin is equivalent of cash, but in electronic form, so one can not hold it in physical form. It is decentralised, which means that it is not controlled by a bank, central authority, or government. Bitcoin’s broader bull run last year was powered by PayPal after it allowed customers to use the currency on its network. (Also Read: From $2,000 To $20,000 In 3 Years And Counting: All You Need To Know About Bitcoin’s Rally )

Bitcoin proponents argue that the cryptocurrency is ‘digital gold’ that can hedge against the risk of inflation sparked by the massive central bank and government stimulus packages designed to counter COVID-19. However, bitcoin has witnessed a volatile, yet positive rally last year while the world was battling against the peak of the coronavirus pandemic.

Meanwhile, in India, the central government is looking to introduce a bill on  bring a bill on cryptocurrencies – ‘Cryptocurrency and Regulation of Official Digital Currency Bill, 2021’ which will create a framework for an official digital currency to be issued by the Reserve Bank of India (Also Read: After Bitcoin Crosses $50,000, What’s The Status Of Cryptocurrencies In India? )