Bitcoin reached another all-time high of US$58,000 on Sunday, February 21 extending its two-month rally. The top-performing cryptocurrency now has a market capitalization of US$1 trillion.
At the start of the year, the price of Bitcoin was around US$34,000 and gained almost a 76% increase since then. The cryptocurrency hit multiple all-time highs over the past week alone before reaching its current US$58,000 mark.
The staggering increase of Bitcoin is attributed to major companies such as Tesla, Visa, Mastercard, Paypal, and BNY Mellon incorporating digital assets into their payment systems. Early in February, Elon Musk, CEO of Tesla announced they invested US$1.5 billion worth of BTC.
Bitcoin has long surpassed the predicted inflection point of US$40,000 claimed by JP Morgan Chase & Co at the start of the year. The digital asset continued to move up from that mark since the second week of January 2021.
However, JP Morgan analysts are still pessimistic about the price escalation of Bitcoin. In a recent memo sent to Reuters, the analysts maintained that the digital asset remains a shaky long-term investment.
‘Crypto assets continue to rank as the poorest hedge for major drawdowns in equities, with questionable diversification benefits at prices so far above production costs, while correlations with cyclical assets are rising as crypto ownership is mainstreamed,’ JP Morgan stated in the memo released by Reuters.
On February 15, JP Morgan released a recent report backing their original statement that the US$146,000 target for Bitcoin is for a long-time frame. Moreover, it can still be subjected to fundamental growth.
The report released by the New York-based financial firm referenced ‘retail impulse’ as one of the key factors that led to Bitcoin’s price rally. According to the firm, the digital asset needs to decrease its volatility so it can sustain its recent price level.
Bitcoin heading to US$100,000 by end of the year
The founder of asset management firm Skybridge Capital Anthony Scaramucci staked his claim that investors can expect Bitcoin to rise to US$100,000.
He said during an interview with CNBC that the ferocious demand and limited supply of the digital asset can lead to Bitcoin’s price doubling by the end of 2021. Despite this claim, Scaramucci warns investors to be cautious of the trend.
‘The thing is volatile, and again I want to be cautious with individual investors,’ said Scaramucci in the interview.
Bitcoin had a similar surge in prices in 2017 when it reached an all-time high of US$20,000 only to drop by 80% by the following year. However, the current rally the digital asset is facing is backed by institutional interest by major companies such as Tesla, Visa Mastercard, and Paypal.
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