Why bitcoin hits $1 trillion in market value for the first time? See what experts say.
Bitcoin News
Bitcoin's rally vaulted it to $1 trillion market capitalization for the first time on Friday.
The popular cryptocurrency climbed over $53,000 for the first time on Friday morning.
Bitcoin's 60 percent increase in February has outperformed traditional assets, from stocks to gold.
Bitcoin's amazing rally catapulted it to a market capitalization of $1 trillion for the first time on Friday, shrugging off fears of a dramatic collapse reminiscent of 2017, when the famous cryptocurrency fell almost 45 percent after hitting all-time highs.
Bitcoin price
Bitcoin reached a high of $53,262 on Friday's Coinbase exchange.
Bitcoin price USD
The 60 percent increase in cryptocurrency this month has far outperformed the increase in traditional assets from stocks to gold. Cryptocurrency alone added more than $415 billion in value this year, data compiled by Bloomberg shows.
"Bitcoin's market cap hitting $1 trillion demonstrates the mainstreaming of cryptocurrency as a store of value," said Adam Liposky, Ecosystem Operations Lead at Pocket Network, a blockchain data ecosystem for Web3 applications. "Most of us in the market view this milestone as validation for the entire market."
The cryptocurrency is now joining a rarified trillion-dollar market capitalization club-like Amazon, Microsoft, Apple, and Alphabet.
"From white paper to $1 Trillion. #Bitcoin is eating gold alive," Gemini's Cameron Winklevoss tweeted.
Pundits have long criticized the cryptocurrency's price volatility and rapid rise. A lot of people fear it's a bubble waiting to burst.
Analysts at JPMorgan said they pointed to the fluctuating price of bitcoin as a problem. They said that bitcoin was far more volatile than gold, which was often pitted against cryptocurrency. "In our opinion, unless bitcoin volatility subsides quickly from here, its current price … looks unsustainable," the analysts said.
Yet, in recent weeks, bitcoin has gained acceptance from major institutions, including BlackRock, BNY Mellon, and Mastercard. Elon Musk's Tesla earlier this month revealed that she bought $1.5 billion of cryptocurrency in January.
"There are a number of reasons why Bitcoin is soaring," said Nicholas Pelecanos, the chief trading officer at the NEM blockchain company. "But what stands out most is the trend that Microstrategy started and Tesla popularized: moving institutional balance sheets into Bitcoin to hedge against inflation."
Bitcoin's rally underpins stimulus packages that governments and central banks have distributed to help bring about a global recovery, which analysts have said have lifted nearly all markets.
