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Bitcoin rally propels cryptocurrency market value to fresh record

The largest cryptocurrency is up about 22% this week

Topics
Bitcoin | cryptocurrency | US markets

Eric Lam | Bloomberg 

Elon Musk
The jump comes after another volatile week in cryptocurrencies marked by Elon Musk’s support for Bitcoin | File photo

climbed toward $40,000 in a rally that helped the market value of digital tokens scale a new peak.

The largest rose as much as 5.6% to $39,959 on Saturday, taking it closer to early January’s all-time high of almost $42,000. The value of more than 6,000 tokens tracked by CoinGecko hit about $1.23 trillion.

The jump comes after another volatile week in cryptocurrencies marked by Elon Musk’s support for and a record runup in Ether, the second-largest token. Billionaire Musk also posted tongue-in-cheek tweets about Dogecoin -- a Shiba Inu-themed unit that began as a joke -- stirring buying that drove its market capitalization past $6 billion.

The developments provide more evidence of the way the casino-like gyrations of digital coins are seeping into the mainstream. High-profile proponents of like Musk say it’s winning broader acceptance in the finance community. Regulators, meanwhile, are stepping up warnings of volatility that could wipe investors out.

“Investor perception is at an all-time high at both the retail and hedge fund levels,” said Jehan Chu, managing partner with blockchain advisory firm Kenetic Capital in Hong Kong.

Even so, many investors still view digital coins as a treacherous sector. That was underlined in the U.S., where the 24-year-old founder of two New York-based hedge funds with more than $100 million in investments pleaded guilty Thursday to securities fraud.

Bitcoin, the largest cryptocurrency, is up about 22% this week. The token may be consolidating before heading toward $50,000, which would imply a market value for it of about $1 trillion, said Mike McGlone, commodities strategist with Bloomberg Intelligence.

Meanwhile, Ether’s eightfold rally over the past year faces possible turbulence from the impending launch of CME Group Inc. futures next week. The contracts may open the door for bearish investors. The digital coin was at $1,680 as of 10:32 a.m. in London on Saturday.

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First Published: Sat, February 06 2021. 16:56 IST
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