The price of bitcoin has risen above $52,000 (£37,000) for the first time, pushing the cryptocurrency’s overall value close to $1 trillion.
The new all-time high was hit on Friday morning, peaking at $52,842 according to CoinMarketCap’s price index.
It continues to trade above $52,600 at the time of writing, and is now just $15 billion away from achieving a $1tn market cap.
Bitcoin’s recent gains mean it is now worth more than the combined market value of payments giants Mastercard and Visa, having risen in price 600 per cent since this time last year.
Its price has been boosted by massive interest from institutional investors, as well as news that major companies are converting their cash holdings into cryptocurrency.
Earlier this month, Tesla announced that it had bought $1.5bn worth of bitcoin in January, when its price was between $30,000 and $40,000.
Software firm Microstrategy also announced plans this week to buy more bitcoin, increasing its already substantial holdings of 72,000 bitcoins. At current prices, this is worth close to $4 billion – roughly half the value of the company’s entire market cap.
Other cryptocurrencies have also experienced a surge in price, with ethereum reaching close to $2,000 for the first time.
“Major investment funds and retail investors alike may be experiencing FOMO (fear of missing out) as bitcoin’s market cap surges towards $1 trillion,” Paolo Ardoino, chief technology officer of cryptocurrency exchange Bitfinex, told The Independent.
“Ethereum is also touching record highs. Both technologies represent a monumental advance with which even the most senior figures in the digital token space are still grappling.”
Market analysts also warned that bitcoin’s notorious volatility could see it follow a similar trajectory to the one it took following market rallies in 2013 and 2017.
“I’m unable to foresee how much of a pullback there will be, or when it will occur, but usually crypto assets tend to overcorrect after a bull run, falling up to 80 per cent from their all-time high,” said Luis Cuende, co-founder of decentralised platform Aragon.
“If something as drastic as that happens, a pull back below $30,000 is likely, but I expect that a lot of buy demand would chime in and restore bitcoin to its $50,000 levels.”
