Bitcoin’s massive rally continued into the weekend, pushing the market capitalization of the world’s first and largest cryptocurrency to $1.2 trillion Saturday, and leading to the broader crypto market’s largest monthly gain on record as institutional adoption helps pour billions of dollars into the nascent space.
As of 9:30 a.m. ET, the price of bitcoin has surged 9% in the past 24 hours to about $57,350, pushing weekly gains to more than 20%, according to CoinMarketCap.
The prices of ether and binance coin, the world’s second- and third-largest tokens, have surged 13% and 120%, respectively, over the past week, helping the broader crypto market amass a total value of nearly $1.8 trillion–nearly twice as much as its $1 trillion market capitalization at the beginning of February.
Experts, including Wedbush Analyst Daniel Ives, are pinning much of the gains to a flood of institutional adoption in recent weeks after electric-carmaker Tesla disclosed a $1.5 billion bitcoin investment earlier this month.
Publicly traded MicroStrategy, one of bitcoin’s biggest corporate shareholders, raised nearly $1.1 billion in debt on Friday to buy more of the pioneering cryptocurrency–nearly twice as much as the firm originally expected to raise given the wave of interest.
On Thursday and Friday, North America’s first two bitcoin exchange-traded funds debuted on the Toronto Stock Exchange, nabbing more than $200 million from investors.
Despite fueling much of the crypto bullishness in recent weeks, billionaire Tesla CEO Elon Musk tweeted early Saturday that bitcoin and ether prices now “do seem high,” though he also indicated the cryptocurrency can serve as a better guard against inflation than gold, the original safe-haven asset.
The price of bitcoin hit a new high of $57,505 at about 7:45 a.m. Eastern on Saturday–nearly 6 times its value one year ago.
The market’s recent gains have now far eclipsed the short-lived price mania that started in 2017, during which prices climbed 15-fold to a then-high of nearly $20,000 thanks in part to apps like Coinbase that made trading easier for individual investors. That bubble proved unsustainable, and bitcoin’s price crashed 80% by the end of 2018 once countries like South Korea started cracking down on cryptocurrency trading.
What We Don’t Know
The biggest question mark surrounding cryptocurrency’s future is regulation, which ultimately led to cryptocurrency prices tanking three years ago. Securities and Exchange Commission officials have hinted that enhanced scrutiny could be on the way, but not all experts are convinced it’ll hurt the market. “Given its still-nascent and volatile nature, we believe less than 5% of public companies will head down the bitcoin investment path in some capacity over the next 12 to 18 months, but could move markedly higher as more regulation and acceptance of this currency takes hold further down the road,” Ives said Friday.
Even staunch bitcoin critics are warming up to the token amid recent gains. Billionaire Jeffrey Gundlach, the CEO of DoubleLine Capital who once called bitcoin “a lie,” called bitcoin “the stimulus asset” in a tweet Thursday, alluding to concerns that heightened government spending could spark problematic inflation and tank the value of the dollar while boosting safe-haven assets like bitcoin and gold.