At the beginning of this year, expectations increased that Bitcoin would reach the $50,000 level during 2021, when its price was above $30,000.
Bitcoin crosses $57,000, so what?
At the beginning of this year, expectations increased that the bitcoin would reach the level of $ 50,000 during 2021, when its price was above $ 30,000. Less than a month later than expected, the leading cryptocurrency is likely to go even further in no time.
and with Bitcoin Arrival Above $57,000, questions are growing: What awaits the currency? What is its future and price? We cannot expect a bubble to burst or something similar, as happened in 2017. The situation is currently different from what it was, as companies and institutions are investing in it, and every day we are witnessing more adoption amid optimistic expectations of digital gold.
Bitcoin market cap reaches $1 trillion
The world's largest cryptocurrency Bitcoin has reached a very important milestone today, with the price of the digital asset exceeding $57,000, bringing the coin's total market cap to over $1 trillion.
With a trillion dollars in existence, the digital currency has now joined the club of elites with a market capitalization of one trillion dollars, the likes of Apple, Saudi Aramco, Microsoft, Amazon and Alphabet A, however, the cryptocurrency is the sixth most valuable asset in the world.
The massive rise of Bitcoin can be linked primarily to financial flows from institutional investors, and while retail investors were leading the rally in 2017, old companies and institutions are leading the way this time, a large number of high net worth investors and institutions have thrown their weight on Bitcoin and some have called it "Digital Gold".
Big-money AI company MicroStrategy has led the way for many other giants. CEO Michael Saylor has been very vocal and supportive of Bitcoin's potential as an asset class. Since then, other companies have joined the march including Tesla, PayPal and MassMutual and Square
Experts predict that Bitcoin still has a lot of room for growth, various analysts have set price targets in the range of $100,000 to $600,000.
Bitcoin is not a hedge
In contrast, analysts at JPMorgan issued a warning that Bitcoin should not be considered a hedge against stocks, seeing that the insane Bitcoin rally is an economic sideshow that should not be used as a hedge against stocks, and is currently trading well above its fair value.
Moreover, the widespread adoption of the cryptocurrency and the increased institutional awareness that is fueling the continued rally, will only increase the correlation with cyclical assets which will eventually lead to the need to invest in Bitcoin as part of a diversification strategy.
Treasury Secretary Janet Yellen does not appear to be a fan of bitcoin and cryptocurrency, describing the world's largest digital assets as a "highly speculative asset," saying it is necessary to ensure that the digital currency is not used as a vehicle for illegal transactions and that the investor is protected. Thus the process of regulating institutions dealing in digital currency and ensuring that they comply with their regulatory responsibilities is very important.
A professional technical and economic analyst in global financial markets since 2004. He holds a Master’s in Business Administration from the American University in Cairo. He works as an economic writer and technical analyst for many international financial companies. He writes daily economic and technical analyzes for many Arabic and English websites specialized in the field of stock exchanges and financial markets.
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