Bitcoin climbed toward US$40,000 ($53,368.40) in a rally that helped the market value of digital tokens scale a new peak.
The largest cryptocurrency rose as much as 4.3% to US$39,499 on Feb 6, taking it closer to early January’s record of almost US$42,000. The value of more than 6,000 tokens tracked by CoinGecko hit an unprecedented US$1.22 trillion.
The jump comes after another volatile week in cryptocurrencies marked by Elon Musk’s support for Bitcoin and a record runup in Ether, the second-largest token. Billionaire Musk also posted tongue-in-cheek tweets about Dogecoin -- a Shiba Inu-themed unit that began as a joke -- stirring buying that briefly drove its market capitalisation past US$6 billion.
See: Cryptocurrency: The next big thing or fool's gold?
The developments provide more evidence of the way the casino-like gyrations of digital coins are seeping into the mainstream. High-profile proponents of Bitcoin like Musk say it is winning broader acceptance in the finance community. Regulators, meanwhile, are stepping up warnings of volatility that could wipe investors out.
“Investor perception is at an all-time high at both the retail and hedge fund levels,” said Jehan Chu, managing partner with blockchain advisory firm Kenetic Capital in Hong Kong.
Even so, many investors still view digital coins as a treacherous sector. That was underlined in the US, where the 24-year-old founder of two New York-based cryptocurrency hedge funds with more than US$100 million in investments pleaded guilty Feb 4 to securities fraud.
See also: Pay for your beef tacos with Bitcoin at Joo Bar
Bitcoin, the largest cryptocurrency, is up about 20% this week. The token may be consolidating before heading toward US$50,000, which would imply a market value for it of about US$1 trillion, said Mike McGlone, commodities strategist with Bloomberg Intelligence.
See also: Elon Musk's support for Bitcoin contributes to record crypto market value
Meanwhile, Ether’s eightfold rally over the past year faces possible turbulence from the impending launch of CME Group Inc. futures next week. The contracts may open the door for bearish investors. The digital coin was at US$1,688 as of 10.35 am in Singapore on Feb 6.
