Bitcoin has once again shown that it is the real king of the crypto market. BTC is the leading asset in terms of both the cost per coin and market cap. Bitcoin has reached a market capitalization of $1 trillion for the first time.
The highest level of bitcoin's market capitalization has stirred up the crypto market. The rally, triggered by the staggering growth of the crypto market flagship, generates such a profit that traders of traditional assets like stocks, bonds, and gold can only dream of. It seems that the crypto market, which has long been considered unreliable and a place for airy-fairy investors is ready to become of the leading and gainful markets.
On Friday, February 19, BTC hit the record high of $53,000. Since the beginning of this month, the capitalization of the coin has increased by $400 billion. Late in the evening, at the end of February 19, bitcoin surged again. By 22:00 Moscow time, a new historical record was broken: bitcoin reached $55,000 and then $55,530. In a few hours, the virtual asset rose in price by another $2,000. On the morning of Saturday, February 20, bitcoin is trading near $55,700, sustaining its bull run.
The current situation leads to heated discussions between supporters and opponents of the crypto market. Crypto skeptics believe that BTC which is a highly volatile asset has scored gains amid signs it is winning acceptance among mainstream investors, large companies, and institutional investors. Opponents of bitcoin claim that it is not backed by anything – neither money nor gold. Its growth is only due to faith in blockchain technology. Crypto enthusiasts think otherwise. They are certain that bitcoin has become popular as it can hedge risks, e.g. inflation. It means a lot in the modern world as interest rates in a number of countries remain near zero.
Among other advantages, experts consider the fact that bitcoin coin is traded for dollars. This attracts many investors and traders, Shane Oliver, the head of investment strategy with AMP Capital Investors, pointed out. During the period of so-called easy money, the number of such market players increases. This is a powerful driver of the growth of the first cryptocurrency, the expert notes.
BTC rally was also fueled by the decision of major companies such as Tesla and MicroStrategy to invest in bitcoin. Not long ago, Tesla, the manufacturer of electric cars, invested $1.5 billion in BTC. MicroStrategy upsized a debt offering through convertible notes to $900 million to buy more bitcoins. According to analysts, such actions of large market players have a positive impact on the dynamics of bitcoin. It seems that more and more market giants are inclined to recognize bitcoin as a means of payment. According to a survey conducted by Bank of America, investment in BTC has become the most popular one in the world along with a long position in tech stocks and a short position on USD.
In 2021, the crypto market is experiencing its finest hour: the dynamics of the cryptocurrency index have overtaken the dynamics of stock exchanges, gold, and bonds. However, it is volatile. So, everything may change all of a sudden. In case of such a scenario, bitcoin will lose popularity due to a number of factors, namely strict government regulation or losses among traders, the head of AMP Capital Investors summarizes.