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Summary
- Bitcoin roars to $55,776 per coin on Friday as it hits $1 trillion market capitalization.
- The cryptocurrency gained over 350 per cent in the past three months, and rising.
- It outstrips returns from traditional avenues of investments such as stocks, and gold.
World’s largest and most popular cryptocurrency, Bitcoin, saw yet another record high on Friday, raising its market cap to $1 trillion, even as the crypto rally continues.
Bitcoin’s spectacular rise, gaining some 350 per cent over the past three months, has left many digital currency enthusiasts flabbergasted. It was trading at $55,776 per coin late on Friday.
Few would have imagined Bitcoin’s astonishing rally, but there will be also others perplexed over whether to hold or release at a time when there is no sign of letting up.
Bitcoin’s fortunes have changed dramatically in the past month after several high-profile financial institutions and companies invested in them or recognized the coins as financial assets. According to CoinMarketCap, Bitcoin gained nearly 8 per cent on Friday to set a new record of $55,776.16.
Among the most famous ones, American electric vehicle maker Tesla Inc. has invested $1.5 billion in cryptocurrency, making it one of the highest bets in the market in recent times.
While investors have lined up to take their share from the money-spinner, financial institutions like Mastercard and BNY Mellon have announced that they would now accept Bitcoin as a financial asset.
Pic Credit: Pixabay.
Can cryptocurrencies replace money?
Yet, others have rejected this high-decibel crypto boom as simply an economic sideshow. They remain skeptical whether cryptocurrencies can replace the good old money.
This pessimistic view also stems from the fact that cryptocurrencies like Bitcoin can be extremely volatile and less suitable for a payment mode. JP Morgan echoed these sentiments recently when it said the digital currencies continue to be the poorest assets compared to the equities.
Bitcoin advocates, however, argue that the digital currency can withstand any inflationary pressure that may arise from the government’s massive capital infusion into the economy for COVID recovery.
Meanwhile, irrespective of the criticisms, investors’ enthusiasm is apparent, given that the crypto run has outstripped the returns from traditional avenues of investments such as commodities, stocks, and gold.
