The Bitcoin price soared to surpass the crypto’s market value of $1 trillion. The event, which was sensationally reported on February 19th, was dubbed a “major milestone” as analysts scrambled to provide explanations to the phenomenon.
According to news publications about the Bitcoin event, the virtual currency was trading a few dollars under $54,000 on the ,material day, before rising to surpass the $55,000 mark in what was described as a 6 percent daily gain.
The market value of a digital asset is calculated by multiplying its price by the volume created.
Although market value cannot be considered to be a surefire way of comparing Bitcoin to its other virtual currency counterparts, the $1 trillion valuation places Bitcoin on a pedestal in the league of the world’s most valued stocks.
The Bitcoin surge reflected on a 360 percent gain over the last half-year, considering that the digital currency had never traded beyond the $20,000 level.
What’s the Cause?
As many people believe that Bitcoin’s rally was influenced by investors seeking to protect their interests against inflation, experts have tried to provide an explanation in rationalizing the Bitcoin boom.
They’ve all seemed to agree that the success has been catalyzed in part by increased adoption of the cryptocurrency by notable investment entities and organizations.
For instance, the Bank of New York Mellon, considered to be the oldest bank in the United States, revealed its intention to make an entry into the world of cryptocurrencies.
Tesla is reported to have turned a significant chunk of its balance sheet cash into Bitcoin, and announced that it would begin accepting crypto as a medium of payment for its goods.
Expert estimations point to Tesla’s success in crypto investment – it is reported that the electric car maker amassed an impressive $1 billion in profits off the $1.5 billion investment that it had committed to Bitcoin.
The above reality comes in the wake of vocal support by Tesla CEO Elon Musk who came out to praise Bitcoin as a better form of liquidity than fiat cash.
In addition, Deutsche Bank research strategist Jim Reid weighed in on the latest events by pointing out Bitcoin’s achievements to the fact that it can generate its own demand.
Investors and companies have been scrambling to throw their stakes on a cryptocurrency that was largely deemed “risky” and a “criminals currency” in the past years. Quite ironically, the digital coin has managed to turn itself into a go-to asset class for people and organizations looking to reap the benefits of crypto.
Further, MicroStrategy, a software firm known to be the first company to directly buy Bitcoin, is said to own about 70,784 Bitcoin valued at more than $3.5 billion. The company’s CEO Michael Saylor is a known proponent of cryptocurrency as a cushion against the falling US dollar.
In a tweet, the business executive defended the crypto industry by stating that speculation only becomes true in the context of users that have failed to understand the relevance of a particular technology.
Bitcoin’s competitiveness cannot be ignored considering that Apple is valued at $2 trillion dollars while Tesla, the most valuable American electric car maker, operates at a market cap of $700 billion.
Expectedly, the proponents of Bitcoin investment came out to celebrate the crypto’s milestone across various platforms. Gemini’s Cameron Winklevoss published a tweet that glorified Bitcoin’s progress from inception to current valuation – from “white paper to $1 trillion”.
Nonetheless, not every influential figure in Wall Street is certain about Bitcoin’s bright future. For instance, Citadel Securities founder Ken Griffin asserted his disinterest in cryptocurrency, while JPMorgan experts termed Bitcoin’s price movement “unsustainable”.