Bitcoin topped $40,000 in a rally that helped the market value of digital tokens scale a new peak.
The largest cryptocurrency rose nearly 7 per cent to $40,498 on Saturday, taking it closer to early January’s all-time high of almost $42,000. The value of more than 6,000 tokens tracked by CoinGecko hit about $1.23 trillion.
The jump comes after another volatile week in cryptocurrencies marked by Elon Musk’s support for Bitcoin and a record run-up in Ether, the second-largest token. Billionaire Mr Musk also posted tongue-in-cheek tweets about Dogecoin – a Shiba Inu-themed unit that began as a joke – stirring buying that drove its market capitalisation past $6bn.
The developments provide more evidence of the way the casino-like gyrations of digital coins are seeping into the mainstream. High-profile proponents of Bitcoin like Mr Musk say it’s winning broader acceptance in the finance community. Regulators, meanwhile, are stepping up warnings of volatility that could wipe investors out.
“Investor perception is at an all-time high at both the retail and hedge fund levels,” said Jehan Chu, managing partner with blockchain advisory firm Kenetic Capital in Hong Kong.
Even so, many investors still view digital coins as a treacherous sector. That was underlined in the US, where the 24 year-old founder of two New York-based cryptocurrency hedge funds with more than $100 million in investments pled guilty on Thursday to securities fraud.
Bitcoin is up about 24 per cent over the past week. The token may be consolidating before heading towards $50,000, which would imply a market value of about $1 trillion, said Mike McGlone, commodities strategist with Bloomberg Intelligence.
Meanwhile, Ether’s eight-fold rally over the past year faces possible turbulence from the impending launch of CME Group futures next week. The contracts may open the door for bearish investors. The digital coin was at $1,683 as of 3.58pm UAE time on Saturday.