Bitcoin keeps setting new records, as, on Friday, its market capitalization reached $1 trillion for the first time in history. The digital currencies price has risen by approximately 350% in the past three months, making some doubtful analysts question their mistrust, while others remain skeptical.
“There will likely be some big fluctuations along the way, but I’m still very bullish, and I believe the uptrend will continue for the time being,” said Jacob Skaaning, portfolio manager at crypto hedge fund ARK36.
JP Morgan’s analysts said bitcoin’s price was above fair value, and it is used very little for commercial purposes.
“Crypto-assets continue to rank as the poorest hedge for major drawdowns inequities, with questionable diversification benefits at prices so far above production costs, while correlations with cyclical assets are rising as crypto ownership is mainstreamed”, JPMorgan said.
Another token, ether, hit an all-time high of $1,974.99 on Friday after its futures were introduced on the Chicago Mercantile Exchange.
Elon Musk said holding the token was a little better than holding cash. Musk also defended the purchase of $1.5 billion worth of bitcoin by Tesla Inc, which was a major reason for the cryptocurrency frenzy we are witnessing.
Bitcoin supporters believe the cryptocurrency can protect from the significant risk of inflation triggered by central banks and government packages designed to counter Covid.
We will have to wait and see if this is an economic side effect against a fall in stock prices or cryptocurrency is here to stay.
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