Helped by Elon Musk | Bitcoin market exceeds $1 trillion

Helped by Elon Musk | Bitcoin market exceeds $1 trillion

(London) A new spike in the price of bitcoin on Friday brings the value of all bitcoins created since 2009 to more than $1 trillion, a market boosted by the enthusiasm of some major companies and despite the concerns of regulators.

Published on February 19, 2021 at 12:10 pm

Around 11:00 a.m., Bitcoin reached a new all-time high of $54,790, up 5.5% for the session.

With more than 18.6 million bitcoins created since its launch in 2009 by anonymous individuals, the entire market represents a potential $1015 billion, according to Coinmarketcap.com.

Since the beginning of the year, the price of bitcoin has risen by 89%, a performance that has led some market players to fear that a bubble similar to that of 2017 could burst.

« Almost as lame » as the dollar…

"Almost as lame" as the dollar...

On Friday, Elon Musk, whose company Tesla participated in the price increase by announcing it had bought $1.5 billion in bitcoin, defended his group’s decision on Twitter.

PHOTO HANNIBAL HANSCHKE, REUTERS ARCHIVE

Elon Musk’s company, Tesla, participated in the price increase by announcing that it had purchased $1.5 billion in bitcoin. Musk defended this decision on Twitter.

« When money suffers from a negative interest rate, you’d have to be a fool not to look elsewhere, » he argued, adding that « Bitcoin is almost as bad as fiat money, I stress « almost ».

Bitcoin supporters see the decentralized network, created by anonymous individuals in 2008, as a way to guard against the actions of central banks.

The maximum number of bitcoins in circulation has been set at 21 million, an amount set in stone on this decentralized network where no one has a hand in monetary policy.

In recent months, many financial companies have also shown interest in Bitcoin.

From the online payment giant Paypal in October to the BlackRock investment fund mastodon at the end of January, via the oldest bank on Wall Street, BNY Mellon, many US financial players have announced that they are preparing to launch services to buy, sell or use cryptomoney.

More than Tesla, less than Google

More than Tesla, less than Google

But the insatiable growth of bitcoin is worrying market observers, who believe that with a price that has quintupled in one year, a sharp correction, or even the bursting of a bubble, is likely.

« Musk’s tweets have changed everything in the last few weeks, we’re not dealing with rational buying, » says a crypto-broker who asked to remain anonymous.

Central banks, for their part, regularly criticize the cryptoskills, such as European Central Bank (ECB) president Christine Lagarde, who described Bitcoin as a « highly speculative asset » in February.

At $1 trillion, the Bitcoin market theoretically exceeds the market capitalization of Tesla or the Chinese group Tencent, and approaches the levels of Alphabet, the parent company of Google ($1.4 trillion).

JPMorgan analysts had predicted that the « capitalisation » of bitcoin could eventually join that of gold used for financial purposes, which they estimate at 2600 billion dollars.

However, the concept of market size for a currency does not convince many economists. Moreover, some of the Bitcoin issued has already disappeared, especially when trading platforms collapsed in the early years of cryptomony.

According to the specialized firm Chainalysis, a fifth of Bitcoins has not moved for more than five years. One or two million of them belong to Satoshi Nakamoto, the pseudonym of the anonymous creator or creators of Bitcoin.

Helped by Elon Musk | Bitcoin market exceeds $1 trillion
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