Photographer: Akos Stiller / Bloomberg
Photographer: Akos Stiller / Bloomberg
Bitcoin is trading at a market value of $ 1 trillion, a boom that is helping the yield of cryptocurrency to outperform the performance of more traditional assets such as stocks and gold.
The largest sign added more than $ 415 billion in value in 2021 to about $ 956 billion, according to data compiled by Bloomberg. The Bloomberg Galaxy Crypto Index, which includes Bitcoin and four other currencies, has more than doubled.
Speculators, corporate treasuries and institutional investors are thought to have promoted the volatile rise of Bitcoin. Crypto believers are questioning the dominant story surrounding the climb: the former sees an asset being embraced because of its ability to hedge risks such as inflation, while the latter feels a predicament that is on top of waves of monetary and fiscal stimulus row.
FOMO – fear of missing out – may be on the agenda, said Shane Oliver, head of investment strategy at AMP Capital Investors Ltd. in Sydney, said and said: ‘in times of easy money it is enlarged and that is partly what drives the current interest. . ”
Bitcoin traded at $ 51,300 in Hong Kong at 1.30pm on Friday after quintupling in the past year. The performance of the crypto index is full of equities, gold, commodities and bonds in 2021.
This month, Tesla Inc. has an investment of $ 1.5 billion and MicroStrategy Inc. increases sales of convertible bonds to $ 900 million to buy even more of the sign. This has brought the currency closer to the US business industry.
Take the lead
The doubling of the crypto index this year overshadows equities and commodities
Source: Bloomberg
“If the fundamentals of companies are now going to join movements in Bitcoin because they have suddenly become speculators on the side, we will be in bubble territory before you know it,” said Craig Erlam, senior market analyst at Oanda. Europa Bpk.
Tesla CEO Elon Musk on Friday posted a somewhat cryptic tweet that appeared in part to defend the company’s actions, saying Bitcoin is a less stupid form of liquidity than cash, adding that the decision of the manufacturer of electric vehicles does not ‘directly reflect. of my opinion. ”
Read more: Musk defends Tesla Bitcoin Move, says signs less stupid than cash
According to the February issue of Bank of America’s global fund manager survey, the ‘long Bitcoin’ trade is considered one of the busiest in the world after exposure to technology and dollar shorts.
AMP’s Oliver said if Bitcoin ‘falls out of favor – for example due to government regulation or investors just going to the next new thing – then it could drop quickly.’
– With help by Emily Barrett